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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 1999
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RPM, INC.
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(Exact name of registrant as specified in its charter)
Ohio 1-14187 34-6550857
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
2628 Pearl Road, P.O. Box 777, Medina, Ohio 44258
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (330) 273-5090
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Item 2. Acquisition Or Disposition Of Assets
------------------------------------
Effective as of August 3, 1999, RPM, Inc. (the
"Company") acquired from Wassall DAP Holdings B.V. ("Wassall B.V.") all the
issued and outstanding Common Shares of both DAP Products Inc., a Delaware
corporation ("DAP US"), and DAP Canada Corp., a Canadian corporation ("DAP
Canada"). DAP US and DAP Canada are collectively referred to herein as ("DAP").
The acquisition was accomplished pursuant to a Stock Purchase Agreement, dated
as of July 9, 1999, between Wassall PLC, Wassall B.V. and the Company (the
"Stock Purchase Agreement"). Wassall B.V. is an indirect wholly owned subsidiary
of Wassall PLC. A copy of the Stock Purchase Agreement is filed as an Exhibit
hereto.
Baltimore-based DAP manufactures and sells caulks and
sealants, spackling and glazing compounds, contact cements and other specialty
adhesives. These products, with brand names such as DAP, Alex Plus, Kwik-Seal,
Durabond, Weldwood and others are sold primarily in the retail market. DAP had
sales in 1998 of approximately $227.4 million.
As consideration for the acquisition of DAP, the
Company paid Wassall B.V. approximately $290 million in cash. The purchase price
and other terms of the Stock Purchase Agreement were determined through
arms-length negotiations. There are no material relationships between Wassall
B.V. and the Company or any of their affiliates, directors or officers.
The purchase price was financed under a Fixed Rate
Promissory Note between the Company and The Chase Manhattan Bank (the
"Promissory Note"). A form of the Promissory Note is filed as an Exhibit hereto.
The principal amount advanced and paid is subject to a fixed interest rate of
5.7%.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(a) Not applicable
(b) Not applicable
(c) Exhibits.
2.1 Stock Purchase Agreement dated as of July 9, 1999, by and
among the Company, Wassall DAP Holdings B.V. and Wassall PLC.
4.1 Form of Fixed Rate Promissory Note by and between the Company
and The Chase Manhattan Bank.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
RPM, INC.
Date: August 4, 1999 By: /s/ Frank C. Sullivan
---------------------
Frank C. Sullivan
Executive Vice President
and Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Description of Exhibit
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2.1 Stock Purchase Agreement dated as of July 9, 1999, by and
among the Company, Wassall DAP Holdings B.V. and Wassall
PLC.
4.1 Form of Fixed Rate Promissory Note by and between the
Company and The Chase Manhattan Bank.
<PAGE> 1
Exhibit 2.1
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STOCK PURCHASE AGREEMENT
AMONG
WASSALL DAP HOLDINGS B.V.,
WASSALL PLC
AND
RPM, INC.
Dated as of July 9, 1999
================================================================================
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TABLE OF CONTENTS
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ARTICLE I. CERTAIN DEFINITIONS................................................................1
ARTICLE II. SALE OF STOCK AND RELATED MATTERS..................................................7
2.1 The Sale..............................................................................7
2.2 Purchase Price........................................................................7
2.3 Related Matters.......................................................................7
ARTICLE III. THE CLOSING........................................................................8
3.1 Time and Place of Closing.............................................................8
3.2 Deliveries by Seller..................................................................8
3.3 Deliveries by Buyer...................................................................9
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLER..........................................10
4.1 Corporate Organization; Etc..........................................................10
4.2 Capitalization of DAP US and DAP Canada..............................................10
4.3 DAP US and DAP Canada Subsidiaries...................................................10
4.4 Authority Relative to this Agreement.................................................11
4.5 Consents and Approvals; No Violations................................................11
4.6 Financial Statements.................................................................12
4.7 Absence of Certain Changes...........................................................12
4.8 Compliance with Law..................................................................13
4.9 Contracts and Commitments............................................................13
4.10 No Undisclosed Liabilities...........................................................13
4.11 Litigation...........................................................................14
4.12 Taxes................................................................................14
4.13 Employee Benefit Plans; ERISA........................................................14
4.14 Title to Properties..................................................................16
4.15 Patents, Trademarks, Etc.............................................................16
4.16 Insurance............................................................................16
4.17 Environmental Matters................................................................17
4.18 Labor Relations......................................................................18
4.19 Brokers and Finders..................................................................18
4.20 Inventory............................................................................18
4.21 Trade Accounts Receivable............................................................18
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4.22 Suppliers and Customers..............................................................19
4.23 Year 2000 Problem....................................................................19
4.24 Disclosed Prior Acquisition Documents; Existing Indemnities..........................19
4.25 Relationship with Related Persons....................................................19
4.26 Product Liability Claims.............................................................19
4.27 Entire Business......................................................................20
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER...........................................20
5.1 Corporate Organization; Etc..........................................................20
5.2 Authority Relative to this Agreement.................................................20
5.3 Consents and Approvals; No Violations................................................20
5.4 Acquisition of Stock for Investment..................................................21
5.5 Financial Capability.................................................................21
5.6 Brokers and Finders..................................................................21
5.7 Buyer's Sophistication...............................................................21
5.8 Buyer's Business.....................................................................21
5.9 Buyer's Deliveries...................................................................21
ARTICLE VI. COVENANTS OF THE PARTIES..........................................................21
6.1 Conduct of Business of the DAP Entities..............................................21
6.2 Access to Information................................................................23
6.3 Adjusted Trade Accounts Receivables..................................................24
6.4 Consents and Approvals...............................................................24
6.5 Filings..............................................................................24
6.6 Covenant to Satisfy Conditions.......................................................25
6.7 Further Assurances...................................................................25
6.8 Preparation of Monthly Management Account............................................25
6.9 Insurance Matters....................................................................25
6.10 Intercompany Accounts................................................................26
6.11 Travelers Letter of Credit...........................................................26
6.12 Tax Returns..........................................................................26
6.13 DAP Chile S.A........................................................................26
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ARTICLE VII. EMPLOYEES AND EMPLOYEE BENEFITS...................................................27
7.1 Employees............................................................................27
7.2 Employee Benefit Plan................................................................27
7.3 Indemnification......................................................................27
7.4 COBRA................................................................................28
ARTICLE VIII. CONDITIONS TO SELLER'S OBLIGATIONS................................................28
8.1 Representations and Warranties True..................................................28
8.2 Performance..........................................................................28
8.3 No Injunction or Proceeding..........................................................28
8.4 Consents.............................................................................28
8.5 Shareholder Approval.................................................................28
8.6 Related Matters......................................................................29
8.7 Certificates.........................................................................29
8.8 DAP Guarantee........................................................................29
8.9 Insurance............................................................................29
ARTICLE IX. CONDITIONS TO BUYER'S OBLIGATIONS.................................................29
9.1 Representations and Warranties True..................................................29
9.2 Performance..........................................................................29
9.3 No Injunction or Proceeding..........................................................29
9.4 Consents.............................................................................29
9.5 Shareholder Approval.................................................................30
9.6 Termination Letter...................................................................30
9.7 Related Matters......................................................................30
9.8 Certificates.........................................................................30
9.9 FIRPTA Certificate...................................................................30
9.10 DAP Guarantee........................................................................30
ARTICLE X. AGREEMENTS OF WASSALL.............................................................30
10.1 Guaranty of Wassall..................................................................30
10.2 Wassall EGM..........................................................................30
10.3 Cash Collateral Agreement............................................................30
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ARTICLE XI. INDEMNIFICATION AND RELATED MATTERS...............................................31
11.1 Indemnification......................................................................31
11.2 Survival of Representations and Warranties...........................................32
11.3 Limitations on Indemnification by Seller.............................................32
11.4 Indemnification Procedures...........................................................33
11.5 Tax Treatment of Indemnity Payments..................................................34
11.6 Computation of Losses................................................................34
11.7 Net Proceeds Offset..................................................................34
11.8 Environmental Claims.................................................................35
ARTICLE XII. TERMINATION AND ABANDONMENT.......................................................36
12.1 Termination..........................................................................36
12.2 Procedure and Effect of Termination..................................................36
ARTICLE XIII. MISCELLANEOUS PROVISIONS..........................................................37
13.1 Amendment and Modification...........................................................37
13.2 Extension; Waiver....................................................................37
13.3 Entire Agreement; Assignment.........................................................37
13.4 Validity.............................................................................37
13.5 Notices..............................................................................37
13.6 Governing Law........................................................................39
13.7 Submission to Jurisdiction; Consent to Service of Process............................39
13.8 Publicity............................................................................40
13.9 Descriptive Headings.................................................................40
13.10 Counterparts.........................................................................40
13.11 Fees and Expenses....................................................................40
13.12 Parties in Interest..................................................................40
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STOCK PURCHASE AGREEMENT
Dated as of July 9, 1999
The parties to this agreement (the "Agreement") are Wassall
DAP Holdings B.V., a Dutch corporation ("Seller"), Wassall PLC, a public limited
company organized under the laws of England and Wales ("Wassall"), and RPM,
Inc., an Ohio corporation ("Buyer").
DAP Products Inc., a Delaware corporation ("DAP US"), is
currently engaged in the business of developing, manufacturing and marketing,
and DAP Canada Corp., a Canadian corporation ("DAP Canada"), is currently
engaged in the business of marketing, compounded products for the residential
and commercial construction, repair and remodeling markets, including, among
other products, caulks and sealants, glazing and filling compounds, ceramic tile
and other adhesives, wood treatment products and specialty paints and coatings
(the "Business").
Seller is the beneficial and record owner of 100 shares of DAP
US Common Stock (as defined below) and one share of DAP Canada Common Stock (as
defined below), which represent all the issued and outstanding capital stock of
DAP US and DAP Canada, respectively.
Seller is a wholly-owned indirect subsidiary of Wassall.
Seller desires to sell, and Buyer wishes to purchase, the
Shares, on the terms and conditions set forth in this Agreement.
The parties therefore agree as follows:
ARTICLE I.
CERTAIN DEFINITIONS
"Adjusted Trade Accounts Receivable" has the meaning ascribed
to such term in Section 4.21.
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities and Exchange Act of 1934, as
amended.
"Basket" has the meaning ascribed to such term in Section
11.3(a).
"Beecham" has the meaning ascribed to such term in Section
4.24(a).
"Benefit Arrangement" means a severance, termination,
consulting or retirement agreement, whether written or oral, and any written or
material oral employment agreement to which any DAP Entity is presently a party
(excluding employment agreements which are terminable at-will).
<PAGE> 7
"Business Day" means any day in which banks are open for
business in New York City.
"Buyer Group" means Buyer and Buyer's Affiliates (including,
from and after the Closing, the DAP Entities) and their respective successors
and assigns.
"Buyer Indemnified Parties" has the meaning ascribed to such
term in Section 11.1(a).
"Cash Collateral Agreement" means the Cash Collateral Account
Agreement dated September 20, 1991 among USG Corporation, DAP Inc., BHI
International Inc., DAP Canada, Wassall and Wassall USA Acquisition, Inc.
"Claim Notice" has the meaning ascribed to such term in
Section 11.4(a).
"Closing" means the closing of the transactions contemplated
by the Agreement.
"Closing Date" means the date on which the Closing actually
occurs and the transactions contemplated hereby become effective.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" means the letter agreement dated
March 15, 1999 between Rothschild Inc., on behalf of Wassall, and Buyer.
"Consent" means a consent, waiver, approval, authorization or
permit.
"Contract" means any of the items referred to in clauses (a)
through (i) of Section 4.9 hereof.
"DAP Canada Common Stock" means the common shares, without par
value, of DAP Canada.
"DAP Entities" means DAP US, the Subsidiaries of DAP US, and
DAP Canada collectively or taken as a whole.
"DAP Indemnified Parties" means the directors and officers of
the DAP Entities and any employee or other person entitled to indemnification
pursuant to the organizational documents of any of the DAP Entities.
"DAP Intercompany Debt" has the meaning ascribed to such term
in Section 2.3(a).
"DAP US Common Stock" means the common stock, par value $0.01
per share, of DAP US.
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"Deemed Net Proceeds" means with respect to any of the Net
Assets Held for Sale that are not sold or disposed of to a third party on or
prior to the Closing Date, $1,375,000 in the case of the Rosemont, Illinois
property and $891,500 in the case of the Tipp City, Ohio office building
property.
"Discount Note" means the Discount Note, dated May 17, 1999,
payable by Wassall to DAP US, as the same may be extended, replaced or
refinanced.
"EGM" means an extraordinary general meeting of Wassall's
shareholders.
"Employee Lease Agreement" means the letter agreement dated as
of January 1, 1999 between DAP US and Wassall USA relating to Jack Wynne.
"Encumbrance" means a claim, lien, encumbrance, easement,
security interest, charge or restriction on transfer of any nature whatsoever.
"Environmental Claim" has the meaning ascribed to such term in
Section 11.8.
"Environmental Laws" means all applicable foreign, federal,
state or local laws, rules, statutes, regulations, codes, ordinances, orders,
decrees, directives, all common law decisions and any other applicable legally
binding requirement of any Governmental Entity, in each case as in effect on the
Closing Date, relating to pollution or protection of the environment, including
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act, the Resource Conservation and Recovery Act, the Clean Air Act,
the Clean Water Act, the Federal Insecticide, Fungicide and Rodenticide Act, the
Toxic Substance and Control Act, the Safe Water Drinking and Toxic Enforcement
Act of 1986 and the Occupational Safety and Health Act( but only to the extent
it regulates occupational exposure to Hazardous Materials) and similar state and
local laws.
"Environmental Loss" has the meaning ascribed to such term in
Section 11.8.
"Environmental Permits" has the meaning ascribed to such term
in Section 4.17(a).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Existing Indemnities" means the indemnification provisions
contained in the purchase agreements referred to in Section 4.24(a) hereof.
"Financial Statements" means the (x) audited balance sheets of
DAP US and the related statements of earnings, retained earnings and cash flows
(including any related notes) as of and for the fiscal years ended December 31,
1997 and 1998, (y) the
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unaudited balance sheets of DAP Canada and the related statements of earnings
and cash flows as of and for the fiscal years ended December 31, 1997 and 1998
and the five month period ended May 31, 1999 and (z) the unaudited balance sheet
of DAP US as of May 31, 1999 and the related unaudited statement of earnings and
cash flows for the five month period then ended.
"Foreign Plans" has the meaning ascribed to such term in
Section 4.13(b).
"GAAP" means generally accepted United States accounting
principles as of the date hereof applied on a consistent basis during the
periods involved.
"Governmental Entity" means a governmental or regulatory
authority, agency or commission, including courts of competent jurisdiction,
domestic or foreign.
"Hazardous Materials" means any substance, material or waste
that is regulated, identified or classified as "hazardous," "toxic," a
"pollutant," "contaminant" or words of similar meaning under any Environmental
Law, including without limitation, petroleum (including crude oil or any
fraction thereof), polychlorinated biphenyls ("PCBs") and asbestos.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.
"Indemnification Agreements" has the meaning ascribed to such
term in Section 7.3
"Indemnified Party" has the meaning ascribed to such term in
Section 11.4(a).
"Indemnifying Party" has the meaning ascribed to such term in
Section 11.4(a).
"Initial Determination Date" means the close of business on
the date immediately preceding the Closing Date.
"Insurance Policies" means all insurance policies with respect
to the property, assets, operations and business of the DAP Entities, whether
purchased directly by or on behalf of the DAP Entities.
"IRS" means the Internal Revenue Service.
"ISRA" means the Industrial Site Recovery Act.
"Joint Policies" has the meaning ascribed to such term in
Section 6.9(a).
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"knowledge" as applied herein to Seller means the actual
knowledge of any vice president or higher officer of Wassall USA or of DAP US or
the Director of Human Resources or Manager of Environmental and Regulatory
Affairs of DAP US.
"Losses" has the meaning ascribed to such term in Section
11.1(a).
"Management Agreement" means the agreement dated September 20,
1991 between DAP US and Wassall USA, as amended.
"Net Assets Held for Sale" means the Rosemont, Illinois
property and the Tipp City, Ohio office building property classified as assets
held for sale in the unaudited balance sheet of DAP US as of May 31, 1999.
"1999 Budget" means the budget for the DAP Entities entitled
"1999 DAP Budget Commentary" dated November 17, 1998, a copy of which was made
available by Seller to Buyer.
"90 Day Period" has the meaning ascribed to such term in
Section 11.3(d).
"Notice Period" has the meaning ascribed to such term in
Section 11.4(a).
"Obligation" means an indenture, mortgage, note, bond,
license, government registration, contract, lease, agreement or other instrument
or obligation.
"Order" means an order, writ, judgment, injunction, decree,
statute, ordinance, rule or regulation.
"Parent Affiliate" means Wassall and any Subsidiary of Wassall
that owns, directly or indirectly, Seller's capital stock.
"Patent and Trademark Rights" means all United States and
foreign patents and patent applications, and all United States and foreign
trademarks, service marks, trade dress, domain names and copyrights for which
registrations have been issued or applications filed therefor and all
tradenames, assumed or fictitious names, which are owned or used by any DAP
Entity or in which any DAP Entity holds any right, title or interest.
"Person" means any individual, corporation, limited liability
company, partnership, trust or other entity of whatever nature.
"Plan" means each "employee benefit plan" as such term is
defined in Section 3(3) of ERISA, and any severance, bonus or other incentive
compensation, deferred compensation, relocation, tuition assistance, stock
purchase, stock option or award, vacation or disability plans, programs or
policies, whether written or otherwise, that any of the DAP Entities maintains
or contributes to on behalf of its current or former employees for which any DAP
Entity has any potential liability.
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"Purchase Price" means an amount equal to U.S. $290,000,000
PLUS $18,346,000 which is the principal amount of the Discount Note (together
with any interest earned thereon) PLUS the Sale Net Proceeds, if any, MINUS the
principal amounts and the make-whole amounts of the DAP Intercompany Debt as of
the Closing Date MINUS the transaction bonuses (which as of the date hereof
amount to $1,018,116) estimated to be payable to employees of the DAP Entities
in connection with the consummation of the transactions contemplated hereby,
which transaction bonuses will be set forth in a notice provided by Seller to
Buyer not less than three days prior to the Closing Date.
"Returns" has the meaning ascribed to such term in Section
4.12(a).
"Sale Net Proceeds" means with respect to any of the Net
Assets Held for Sale that are sold or disposed of to a third party between the
date hereof and the Closing Date, the proceeds (net of brokerage expenses and
other expenses directly related to such sale or other disposition) of such sale
or other disposition.
"Schering-Plough" has the meaning ascribed to such term in
Section 4.24(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Segregated Account" has the meaning ascribed to such term in
Section 2.3(a).
"Selected Agreements" means the agreements identified on
Section 1 of the Disclosure Schedule.
"Seller Receivable" has the meaning ascribed to such term in
Section 11.3(d).
"Shares" means, collectively, all of the outstanding DAP US
Common Stock and the DAP Canada Common Stock.
"Subsidiary" means any corporation, association or other
business entity of which more than 50% of the total voting power of stock
entitled to vote in the election of directors or managers thereof is at the time
owned or controlled, directly or indirectly, by such Person.
"Taxes" means all taxes, assessments and charges imposed by
any federal, state, local or foreign taxing authority including interest,
penalties and additions thereto.
"Termination Letter" means a letter terminating the Management
Agreement and the Employee Lease Agreement in the form of Annex A hereto.
"Travelers Letter of Credit" has the meaning ascribed to such
term in Section 2.3(c).
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"USG" has the meaning ascribed to such term in Section
4.24(a).
"USG Agreement" has the meaning ascribed to such term in
Section 4.24(a).
"Wassall Group" means Seller and Seller's Affiliates
excluding, from and after the Closing, any DAP Entity.
"Wassall USA" means Wassall USA, Inc., a Delaware corporation.
"Year 2000 Problem" has the meaning ascribed to such term in
Section 4.23.
ARTICLE II.
SALE OF STOCK AND RELATED MATTERS
2.1 THE SALE. Upon the terms and subject to the conditions of this
Agreement, at the Closing, Seller will sell, assign, transfer and deliver to
Buyer, and Buyer will purchase from Seller, the Shares.
2.2 PURCHASE PRICE. In consideration of the aforesaid sale, assignment,
transfer and delivery of the Shares at the Closing, Buyer will pay or cause to
be paid to Seller, in cash, the Purchase Price. Of the Purchase Price, U.S.
$5,000,000 will be allocated to the DAP Canada Common Stock and the balance to
the DAP US Common Stock.
2.3 RELATED MATTERS
(a) U.S. $18,346,000, together with any interest earned thereon, is
being held by DAP US in a segregated account (the "Segregated Account"), and
such amount shall not be removed or otherwise used by Seller or DAP US other
than to be applied towards repayment of (1) that certain 9.14% Note due 2005
dated June 15, 1995 in the principal amount of U.S. $41,800,000 payable by DAP
US to Wassall Finance Inc. and (2) that certain letter agreement between Wassall
Finance Inc. and DAP US with respect to a $26,000,000 credit facility, as
amended (together, the "DAP Intercompany Debt"). At any time prior to the
Closing Date, Seller may, but shall be under no obligation to, cause DAP US to
pay all or a portion of the amount referred to in the immediately preceding
sentence to Wassall Finance Inc. to be applied towards repayment of the DAP
Intercompany Debt.
(b) At the Closing, Buyer shall cause DAP US to, and if necessary shall
pay to DAP US an amount sufficient to, pay to Wassall Finance Inc. an amount
equal to the outstanding indebtedness (including accrued and unpaid interest
thereon and the make-whole amount with respect thereto) as of the Closing Date
under the DAP Intercompany Debt. As of the date immediately preceding the date
hereof, the principal amounts outstanding under the instruments described in
clauses (1) and (2) above are $41,800,000 and $16,000,000, respectively, and the
accrued and unpaid interest with
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respect thereto are $240,746 and $92,152 respectively, and the estimated
make-whole amounts with respect thereto are $3,597,720 and $1,366,400,
respectively. Not less than three days prior to the Closing Date, Seller will
provide Buyer with written notice setting forth the aggregate amounts that will
be outstanding (inclusive of interest and the make-whole amounts) as of the
Closing Date under the DAP Intercompany Debt, it being understood that Seller
will provide a revised notice if any of the make-whole amounts change between
the date of such notice and the Closing.
(c) At or prior to the Closing:
(i) Buyer shall cause Seller and its Affiliates to be discharged
from (or will, as contemplated by Section 6.11, indemnify them against)
any and all costs, liabilities and obligations relating to the letter of
credit in the amount of U.S. $2,000,000 in favor of The Travelers
Indemnity Company (the "Travelers Letter of Credit").
(ii) DAP US shall pay to Wassall USA all amounts owing under each
of the Employee Lease Agreement and the Management Agreement. As of the
date immediately preceding the date hereof, the estimated amount
outstanding under each such agreement is $12,500 (exclusive of the
out-of-pocket expenses payable thereunder) and $125,000, respectively.
(iii) To the extent necessary, Buyer shall cause DAP US to
refinance its short term credit facility with National City Bank, Dayton
Branch. As of the date immediately preceding the date hereof, the
principal amount outstanding under such facility is $5,500,000.
ARTICLE III.
THE CLOSING
3.1 TIME AND PLACE OF CLOSING. Upon the terms and subject to the
conditions contained in this Agreement, the Closing will take place at the
offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, New York
10153 at 9:30 A.M. (local time) on the first Business Day following the
satisfaction or waiver of all conditions set forth in Articles VIII and IX
hereof but no earlier than July 30, 1999, or at such other place or time or both
as the parties may agree.
3.2 DELIVERIES BY SELLER. At the Closing, Seller will deliver or cause
to be delivered the following to Buyer:
(a) Stock certificates representing the Shares accompanied by stock
powers duly endorsed in blank or accompanied by duly executed instruments of
transfer.
(b) The resignations of all members of the Board of Directors of
each of the DAP Entities.
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(c) The evidence and certificates contemplated by Sections 9.7, 9.8
and 9.9 hereof.
(d) The Termination Letter.
(e) Copies of all Consents referred to in Section 9.4.
(f) A copy of the resolutions of the board of directors of each of
Wassall and Seller authorizing the execution, delivery and performance,
respectively, of this Agreement, and a certificate of each of their respective
secretaries or assistant secretaries, dated as of the Closing Date, to the
effect that such resolutions were duly adopted and are in full force and effect.
(g) An opinion of Weil, Gotshal & Manges LLP, U.S. counsel for
Seller and Wassall, Weil, Gotshal & Manges, U.K. counsel for Wassall and of
Loeff Claeys Verbeke, Dutch counsel for Seller, each addressed to Buyer and
dated the Closing Date, substantially in the forms attached hereto as Annex B.
(h) A certificate of good standing of DAP US from the Secretary of
State of the State of Delaware and a certificate of status of DAP Canada from
the Ministry of Consumer and Commercial Relations of the Province of Ontario,
each dated not more than 30 days prior to the Closing.
(i) Such other documents as Buyer may reasonably request.
3.3 DELIVERIES BY BUYER. At the Closing, Buyer will deliver or cause to
be delivered the following to Seller:
(a) The Purchase Price in immediately available funds without any
deduction or withholding for any tax or other governmental charges to an
account, which account will be designated in writing by Seller at least three
Business Days prior to the Closing.
(b) The evidence and certificate contemplated by Sections 8.6 and
8.7 hereof.
(c) Copies of all Consents referred to in Section 8.4.
(d) A copy of the resolutions of the board of directors of Buyer
authorizing the execution, delivery and performance of this Agreement, and a
certificate of the secretary or assistant secretary of Buyer, dated as of the
Closing Date, to the effect that such resolutions were duly adopted and are in
full force and effect.
(e) An opinion of Calfee Halter & Griswold LLP, counsel for Buyer,
addressed to Seller and Wassall and dated the Closing Date, substantially in the
form attached hereto as Annex C.
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(f) Such other documents as Seller may reasonably request.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
4.1 CORPORATE ORGANIZATION; ETC. Each of Seller, DAP US and DAP Canada
is a corporation duly organized, validly existing, and DAP US is in good
standing, under the laws of the respective jurisdiction of its incorporation.
Each of DAP US and DAP Canada has all requisite corporate power and authority to
conduct its business as it is now being conducted and to own, lease and operate
its property and assets. Each of the DAP Entities is qualified or licensed to do
business as a foreign corporation or act as a provincial corporation and DAP US
is in good standing in each jurisdiction in which ownership of property or the
conduct of its business requires such qualification or license. Section 4.1 of
the Disclosure Schedule sets forth an accurate, complete and correct list of all
jurisdictions in which DAP US and DAP Canada are qualified or licensed to do
business or act as a provincial corporation. True and complete copies of the
Certificate and Articles of Incorporation (including all Articles of Amendment)
and By-Laws (or other comparable governing documents) of each of DAP US and DAP
Canada, as presently in effect, have been heretofore delivered to Buyer.
4.2 CAPITALIZATION OF DAP US AND DAP CANADA. The authorized capital
stock of DAP US consists of 1,000 shares of DAP US Common Stock and the
authorized capital stock of DAP Canada consists of an unlimited number of shares
of DAP Canada Common Stock, of which the Shares are the only shares issued and
outstanding as of the date hereof. Seller is the record and beneficial owner of
the Shares, and Seller has good and valid title to such Shares, free and clear
of all Encumbrances, except as set forth in Section 4.2(a) of the Disclosure
Schedule. All the Shares are duly authorized, validly issued, fully paid and
nonassessable and were not issued in violation of any preemptive rights. Except
as set forth in Section 4.2(b) of the Disclosure Schedule, there are no
outstanding (a) securities convertible into or exchangeable for the capital
stock of DAP US or DAP Canada, (b) options, warrants or other rights to purchase
or subscribe for capital stock of DAP US or DAP Canada or (c) contracts,
commitments, agreements, understandings or arrangements of any kind relating to
the issuance of any capital stock of DAP US or DAP Canada, any such convertible
or exchangeable securities or any such options, warrants or rights, pursuant to
which, in any of the foregoing cases, DAP US or DAP Canada is subject or bound.
The consummation of the transactions contemplated hereby will convey to Buyer
good and valid title to the Shares, free and clear of all proxies, voting
agreements and, except as set forth in Section 4.2(a) of the Disclosure Schedule
and those created in favor of Buyer under this Agreement, other Encumbrances.
4.3 DAP US AND DAP CANADA SUBSIDIARIES. Each Subsidiary of DAP US is
listed in Section 4.3(a) of the Disclosure Schedule together with its
jurisdiction of incorporation or organization and the percentage interest held
directly or indirectly by
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DAP US. DAP Canada does not have any Subsidiaries. All issued and outstanding
capital stock of the DAP US Subsidiaries is validly issued, fully paid and
nonassessable, and, except as set forth in Section 4.3(b) of the Disclosure
Schedule, is owned, directly or indirectly, by DAP US, free and clear of all
Encumbrances. There are no outstanding (a) securities convertible into or
exchangeable for the capital stock of any of the DAP US Subsidiaries, (b)
options, warrants or other rights to purchase or subscribe for capital stock of
any of the DAP US Subsidiaries or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any
capital stock of any of the DAP US Subsidiaries, any such convertible or
exchangeable securities or any such options, warrants or rights pursuant to
which, in any of the foregoing cases, DAP US or its Subsidiaries is subject or
bound. Each Subsidiary of DAP US is a duly organized and validly existing
corporation or other entity in good standing under the laws of the jurisdiction
of its incorporation and has all requisite corporate power and authority to own
its properties and carry on its business as presently conducted.
4.4 AUTHORITY RELATIVE TO THIS AGREEMENT. Seller and Wassall have all
requisite corporate authority and power to execute and deliver this Agreement
subject to the approval by the holders of a majority of the ordinary shares of
Wassall. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby by Seller and Wassall have been duly and
validly authorized by all required corporate action and, upon receipt of the
approval of Wassall's shareholders, no other corporate proceedings on the part
of Seller or its Parent Affiliates are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Seller and Wassall and, assuming this
Agreement has been duly authorized, executed and delivered by Buyer, constitutes
a valid and binding agreement of Seller and Wassall, enforceable against Seller
and Wassall in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
4.5 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth in
Section 4.5 of the Disclosure Schedule, neither the execution and delivery of
this Agreement by Seller or Wassall nor the consummation of the transactions
contemplated hereby by Seller or Wassall will (a) conflict with or violate any
provision of the Certificate or Articles of Incorporation or By-Laws (or other
comparable governing documents) of Seller, any Parent Affiliate or any DAP
Entity, (b) require any material Consent of, or filing with or notification to,
any Governmental Entity, except under ISRA and for compliance with the
applicable requirements of the HSR Act under which all required waiting periods
have expired, (c) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration of any obligation to repay)
under, any of the terms, conditions or provisions of any material Obligation to
which Seller, any Parent Affiliate or any
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DAP Entity is a party or by which Seller, any Parent Affiliate or any DAP Entity
or any of their respective property or assets may be bound including, without
limitation, the Selected Agreements, except such violations, breaches and
defaults as to which requisite waivers or consents have been, or will be prior
to Closing, obtained, (d) violate any Order of any Governmental Entity
applicable to Seller, any Parent Affiliate or any DAP Entity, (e) result in the
creation of any Encumbrance against or with respect to the Shares or any assets
of any DAP Entity, or (f) assuming the correctness of Buyer's representation and
warranty contained in Section 5.8, entitle the counterparties to the Selected
Agreements to exercise the rights described in Section 4.2(a) of the Disclosure
Schedule.
4.6 FINANCIAL STATEMENTS. Schedule 4.6 of the Disclosure Schedule sets
forth the Financial Statements. The Financial Statements fairly present the
financial position and earnings and cash flows of DAP US or DAP Canada, as the
case may be, and, in the case of DAP US, retained earnings, in each case as of
the dates or for the periods presented therein in conformity with GAAP, except
as otherwise noted therein.
4.7 ABSENCE OF CERTAIN CHANGES. Except as set forth in Section 4.7 of
the Disclosure Schedule, since December 31, 1998, the DAP Entities have not (a)
suffered any material adverse change in their business, operations or financial
position, (b) suffered any material damage, destruction or loss, whether covered
by insurance or not, to their properties, assets or business, (c) conducted
their business in any material respect not in the ordinary and usual course
consistent with past practice, except pursuant to the terms of this Agreement,
(d) changed in any respect any accounting principle or policy, (e) except in the
ordinary course of business consistent with past practice, sold, transferred or
otherwise disposed of, any of their material properties or assets, (f) made any
loan to, or (except for transactions entered into at arms' length in the
ordinary course of business) entered into any other transaction with, any of
their consultants or agents that are natural persons, directors or officers or
their stockholders or any of the Parent Affiliates, other than among or between
any of the DAP Entities, (g) made any capital expenditures in the aggregate in
excess of that contemplated by the 1999 Budget, (h) sold any of their inventory
other than in the ordinary course of business, (i) made any payments to
Affiliates other than among or between any of the DAP Entities or in the
ordinary course of business, (j) made any declaration, setting aside or payment
of any dividend or other distribution in respect of their capital stock or any
direct or indirect redemption, retirement, purchase or other acquisition by them
of any shares of their capital stock, (k) incurred any indebtedness for borrowed
money other than indebtedness incurred under the DAP Intercompany Debt and the
instrument described in clause (iii) of Section 2.3(c) hereof or among or
between any of the DAP Entities, (l) made any change in existing credit
arrangements with any bank or other institution, (m) entered into or assumed any
contract, agreement, arrangement, lease (as lessor or lessee), license or other
commitment, whether written or oral, involving more than $50,000 in each
instance, except in the ordinary course of business, (n) made any payment of, or
commitment to pay, any severance or termination pay to any officer, director,
consultant that is a natural person or stockholder, (o) discharged or satisfied
any material Encumbrance or paid any liability, except in the ordinary course of
business, (p) waived or released any material
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rights, (q) canceled or compromised any debts owed to them or known claims
against others exceeding $50,000 in the aggregate, other than in good faith and
in the ordinary course of business, (r) wrote off or reduced any accounts
receivable other than in good faith and in the ordinary course of business, (s)
suffered or experienced a strike, work stoppage, material slowdown or other
material labor dispute, or (t) made any sale, transfer or grant of any rights
under any leases, licenses, agreements, patents, inventions, trademarks,
tradenames, service marks, copyrights or with respect to any trade secrets or
know-how, other than in the ordinary course of business.
4.8 COMPLIANCE WITH LAW. Except as set forth in Section 4.8(a) of the
Disclosure Schedule, each DAP Entity has complied and is currently in compliance
with all applicable Orders of any Governmental Entity in all material respects.
Except as set forth in Section 4.8(b) of the Disclosure Schedule, each DAP
Entity has all material governmental licenses and permits necessary to conduct
its business as currently conducted.
4.9 CONTRACTS AND COMMITMENTS. Section 4.9(a) of the Disclosure
Schedule sets forth a complete list of all (a) Benefit Arrangements, (b)
collective bargaining agreements to which any DAP Entity is a party, (c)
agreements which require aggregate future payments by or to any DAP Entity of
more than $100,000 which are not terminable by such DAP Entity on less than
ninety days' notice without penalty (other than purchase orders entered into in
the ordinary course of business), including, without limitation, the USG
Agreement, (d) agreements containing covenants limiting the freedom of any DAP
Entity to compete with any person in any line of business or in any area or
territory, (e) license agreements with respect to the Patent and Trademark
Rights, (f) indentures, mortgages and notes or other debt instruments evidencing
indebtedness of any DAP Entity, (g) agreements between any of the DAP Entities
and any member of the Wassall Group (excluding the DAP Entities), (h) leases for
real property to which any DAP Entity is a party and (i) agreements to which any
DAP Entity is a party under which it has advanced or loaned any amount to any of
its directors or officers other than in the ordinary course of business. Except
as set forth in Section 4.9(b) of the Disclosure Schedule, all of the Contracts
are in full force and effect and, as to each Contract, there does not exist
thereunder any default on the part of any DAP Entity, or to the best of Seller's
knowledge, any other party thereto. Except as set forth in this Agreement or in
Section 4.9(c) of the Disclosure Schedule, no DAP Entity is a party to any
agreement which would require any payment to be made by such DAP Entity to any
other party in connection with the consummation of the transactions contemplated
by this Agreement (either alone or upon the occurrence of any additional acts or
events).
4.10 NO UNDISCLOSED LIABILITIES. The DAP Entities have no liability
(whether accrued, absolute, contingent or otherwise and whether known or
unknown) other than liabilities (a) of a nature not required to be disclosed or
reflected in a balance sheet prepared in accordance with GAAP or the notes
thereto, (b) reflected or reserved against (to the extent of the reserves
therefor) in the Financial Statements (or, to the extent expressly quantified
therein, in the notes thereto), (c) incurred or arising in the ordinary
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course of business since December 31, 1998, or (d) with respect to the matters
described in the Disclosure Schedule (including, without limitation, Section
4.10 thereof).
4.11 LITIGATION. Except as set forth in Section 4.11 of the Disclosure
Schedule, as of the date hereof, there is no action, suit or proceeding before
any Governmental Entity pending or, to the knowledge of Seller, threatened,
against any of the DAP Entities.
4.12 TAXES. (a) Except as set forth in Section 4.12(a) of the
Disclosure Schedule, each of the DAP Entities has duly and timely (after giving
effect to extensions) filed all federal income and all other material returns,
declarations, reports, estimates, information returns and statements ("Returns")
required to be filed by (or with respect to) each in respect of any Taxes.
Except as set forth in Section 4.12(a) and 4.12(b) of the Disclosure Schedule,
all Taxes due and owing by any of the DAP Entities have been paid or adequately
provided for, net of any reserves provided therefor in the Financial Statements.
Except as set forth in Section 4.12(c) of the Disclosure Schedule, as of the
date hereof there are no audits or similar proceedings by any taxing authority
pending with respect to Taxes of any DAP Entity. No DAP Entity has, with respect
to any assets or property held, filed a consent to the application of Section
341(f) of the Code.
(b) DAP US is not and has not been a United States real property
holding corporation (as defined in Section 897(c)(2) of the Code) during the
five-year period ending on the Closing Date.
(c) Except as set forth in Section 4.12(d) of the Disclosure
Schedule, no DAP Entity is a party to or bound by any Tax allocation, Tax
indemnity or Tax sharing agreement that obligate it to make payment to another
Person.
4.13 EMPLOYEE BENEFIT PLANS; ERISA. (a) Section 4.13(a) of the
Disclosure Schedule contains a complete list of all Plans; provided, however,
that the failure to schedule a Plan shall not be a breach of representation
unless such unscheduled Plan is a material Plan. With respect to each Plan, each
of DAP US and DAP Canada has heretofore delivered or made available to Buyer, to
the extent applicable: (i) true and complete copies of each Plan (including all
amendments), (ii) complete copies of the most recent Form 5500 filed for the
past three years with respect to each Plan with the IRS and (iii) copies of the
most recent IRS determination letters issued with respect to each Plan. None of
the Plans is a multiemployer plan within the meaning of Section 3(37) of ERISA.
(b) Except as set forth in Section 4.13(b) of the Disclosure
Schedule, (i) there have been no non-exempt prohibited transactions within the
meaning of Section 406 of the ERISA, or Section 4975 of the Code with respect to
any of the Plans; (ii) there is no outstanding liability under Title IV of ERISA
with respect to any of the Plans other than for payment of premiums to the PBGC
(which have been paid when due) or contributions not yet due; (iii) the PBGC has
not instituted proceedings to terminate any of the Plans; (iv) none of the Plans
has incurred any "accumulated funding deficiency"
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(as defined in Section 302 of ERISA and Section 412 of the Code) whether or not
waived, as of the last day of the most recent fiscal year of each of the Plans
ended prior to the date of this Agreement for which there is any outstanding
deficiency or liability and since such date, there has not been a material
adverse change in the funded status of any Plan; (v) each of the Plans has been
operated and administered in accordance with its terms and applicable laws
except for any failures that would not result in a liability (including any Tax
or penalty under ERISA, the Code or any foreign law, the cost to correct such
failure and reasonable professional fees) material to the relevant Plan; (vi) to
the knowledge of Seller, each DAP Entity has the right to amend or terminate,
without the consent of any other person, any Plan, except as proscribed by law;
(vii) each of the Plans and any related trusts are, and for all prior periods
(for which the statute of limitations is open) have been, "qualified" within the
meaning of Sections 401(a) and 501(a) of the Code, have been determined by the
IRS to be so qualified and nothing has occurred since the date of such
determination letters which would adversely affect the qualified status of such
plans and trusts and which could result in a material liability (as defined in
subparagraph (v) above); (viii) there are no actions, suits or written claims
pending (other than routine claims for benefits) or, to the best knowledge of
each DAP Entity, threatened against any Plan or the assets thereof; (ix) no DAP
Entity maintains any Plan under which it would be obligated to pay benefits
because of the consummation of the transaction contemplated by this Agreement;
(x) there are no unfunded benefit liabilities within the meaning of Section
4001(a)(18) of ERISA with respect to any defined benefit plan maintained by any
DAP Entity, as determined under the actuarial assumptions used in the most
recent valuation report for the Plan; (xi) no DAP Entity has taken any actions
to terminate any Plan for which there is any outstanding liability; (xii) no
"reportable event" (as defined in ERISA and the regulations thereunder, but
excluding any such event for which the thirty day notice requirement has been
waived) has occurred with respect to any Plan; (xiii) no DAP Entity is required,
nor has it ever been required, to contribute with respect to any multiemployer
plan within the meaning of Section 3(37) of ERISA for which there is any
outstanding liability; (xiv) each DAP Entity has made or properly accrued on the
books and records (as of the end of the month prior to the Closing Date) of the
appropriate DAP Entity all contributions (including periodic installments)
required by law or contract to be made to any Plan; (xv) no Plan by its terms is
designed to provide benefits for persons who are not active employees or
directors of a DAP Entity; (xvi) to the knowledge of Seller, except with respect
to the Plans currently maintained by each DAP Entity, no DAP Entity has any
liability of any nature, whether absolute or contingent, with respect to any
Plan which was in the past maintained by it or to which it was required to
contribute; (xvii) to the knowledge of Seller, no DAP Entity has any liability
of any nature, whether absolute or contingent, with respect to any Plan which
was in the past or is currently maintained by any other sponsor or to which any
other employer or sponsor was in the past or is currently required to
contribute; and (xviii) with respect to each Plan that is maintained outside the
United States and covers employees substantially all of whom are employed
outside the United States (the "Foreign Plans"): (a) all employer and employee
contributions to and payments from each Foreign Plan required by law or by the
terms of such plan have been made, or, if applicable, accrued in accordance with
normal accounting practices; and (b)
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each Foreign Plan required to be registered has been registered and has been
maintained in good standing with applicable Governmental Entities except for any
failures that would not result in a liability (including any Tax, penalty, the
cost to correct such failure and reasonable professional fees) material to the
relevant Foreign Plan.
4.14 TITLE TO PROPERTIES. Each DAP Entity has good, valid and, in the
case of real property, marketable fee simple, title to all of the assets and
properties which it owns and which are reflected on the Financial Statements
(except for assets and properties sold, consumed or otherwise disposed of by a
DAP Entity in the ordinary course of business since December 31, 1998 or any Net
Assets Held for Sale which are sold or disposed of on or prior to Closing), and
such assets and properties are owned free and clear of all Encumbrances, except
for (i) Encumbrances listed in Section 4.14 of the Disclosure Schedule, (ii)
liens for current Taxes not yet due and payable or for Taxes the validity of
which is being contested in good faith, (iii) Encumbrances to secure
indebtedness reflected on the Financial Statements, (iv) mechanic's,
materialmen's and other Encumbrances which have arisen in the ordinary course of
business and which, in the case of such other Encumbrances, are not material in
the aggregate, (v) zoning, entitlement, building and other land use and
environmental regulations by any Governmental Entity, provided that such
regulations have not been materially violated and (vi) such other imperfections
in title, including Encumbrances which do not materially interfere with the
present use or marketability of any assets or property subject thereto or
affected thereby.
4.15 PATENTS, TRADEMARKS ETC. Section 4.15(a) of the Disclosure
Schedule sets forth a list of the Patent and Trademark Rights. Section 4.15(a)
of the Disclosure Schedule also sets forth the owner or licensor and any
licensee of the Patent and Trademark Rights. Except as set forth in Section
4.15(b) of the Disclosure Schedule, (a) DAP US and DAP Canada own or possess
adequate licenses or other valid rights to use all registered Patent and
Trademark Rights and, to the knowledge of Seller, all unregistered Patent and
Trademark Rights, (b) the Patent and Trademark Rights are, to the knowledge of
Seller, valid and the validity of the Patent and Trademark Rights and the title
thereto of DAP US or DAP Canada are not being questioned in any litigation to
which any of the DAP Entities is a party nor, to the knowledge of Seller, is any
such litigation threatened and (c) to the knowledge of Seller (i) the conduct of
the business of each DAP Entity as now conducted does not infringe or otherwise
conflict with any registered patents, trademarks, service marks, trade dress,
domain names, trade names or copyrights of others and (ii) none of the DAP
Entities has received written notice alleging any such conflict.
4.16 INSURANCE. The Insurance Policies are in full force and effect and
none of the DAP Entities is in material default of any provision thereof. DAP US
has heretofore delivered or made available to Buyer copies of all Insurance
Policies that have been issued by carriers. Seller makes no representation or
warranty that such Insurance Policies will be continued or are continuable after
the Closing.
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4.17 ENVIRONMENTAL MATTERS. Except as set forth in Section 4.17 of the
Disclosure Schedule, (a) the DAP Entities have timely obtained, complied with
and currently possess all material permits, licenses or authorizations required
by Environmental Laws (the "Environmental Permits"), none of which shall be
adversely affected or lost as a result of the transactions contemplated by this
Agreement, and are in material compliance with all such Environmental Permits
and applicable Environmental Laws.
(b) No DAP Entity has received any written claims of noncompliance
with or potential liability under Environmental Laws with respect to any on-site
facility owned or operated by any DAP Entity or off-site location to or at which
any Hazardous Material owned or possessed by any DAP Entity was transported,
treated, stored or disposed of including, but not limited to, claims of
potential liability or alleged noncompliance with Environmental Law as a result
of a release of Hazardous Materials, which Environmental Claim is pending or
unresolved, and, to the knowledge of Seller, no such Environmental Claims have
been threatened against any of the DAP Entities.
(c) No DAP Entity is subject to any pending or unresolved order,
writ, judgment, injunction, decree or agreement (other than the USG Agreement)
relating to compliance with any Environmental Law or to investigation or cleanup
of Hazardous Materials under any Environmental Law and no DAP Entity has
received any written communication alleging that such DAP Entity is or may be
responsible for any investigation or cleanup of Hazardous Materials under any
Environmental Law.
(d) To the knowledge of Seller, there are no underground storage
tanks located on any real property currently or formerly owned or operated by
any DAP Entity and no underground storage tanks have been removed from any real
property owned or operated by any DAP Entity.
(e) To the knowledge of Seller, there are no friable
asbestos-containing materials or friable presumed asbestos-containing materials,
electrical transformers containing PCBs that are owned by the DAP Entities, or
urea formaldehyde foam insulation located on any real property owned or operated
by any DAP Entity.
(f) To the knowledge of Seller, there has not been a release of
Hazardous Materials at or from any property currently or formerly owned or
operated by any of the DAP Entities that could reasonably be expected to result
in any DAP Entity incurring material costs and liabilities under Environmental
Laws.
(g) To the knowledge of Seller, the DAP Entities have not operated
any landfills, surface impoundments, or injection wells, on any part of the real
property currently or formerly owned or operated by the DAP Entities.
(h) Seller has made available to Buyer copies of all material
written environmental assessments, investigations, audits, or other
environmental reports prepared by Seller, any DAP Entity or any environmental
consultants retained by Seller
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or any of the DAP Entities relating to any real property owned or operated by a
DAP Entity.
4.18 LABOR RELATIONS. Except as set forth in Section 4.18(a) of the
Disclosure Schedule, none of the employees of any DAP Entity is covered by a
collective bargaining agreement. No election or, to the knowledge of Seller,
unionization drive is currently being conducted with respect to any employees of
DAP US. Except as set forth in Section 4.18(b) of the Disclosure Schedule, as of
the date hereof, there is no unfair labor practice complaint or other proceeding
against DAP US pending before the National Labor Relations Board, and there is
no labor strike pending or, to the knowledge of Seller, threatened against DAP
US.
4.19 BROKERS AND FINDERS. Except for Rothschild Inc., whose fees will
be paid by Seller, none of Seller, the Parent Affiliates, the DAP Entities or
any of their respective officers, directors or employees has employed any broker
or finder or incurred any liability for any investment banking fees, brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement.
4.20 INVENTORY. Each of the DAP Entities' inventories are good and
usable, not obsolete and reasonably capable of being sold, used or consumed in
the usual and ordinary course of business as now conducted, and are valued in
accordance with GAAP at the lower of cost (determined on the first-in, first-out
method) or market with all obsolete items and items significantly below standard
quality having been written down to net realizable market or scrap value, or
having been adequately reserved for such that the net amount reflected on the
Financial Statements is equal to their net realizable market or scrap value.
4.21 TRADE ACCOUNTS RECEIVABLE. All of the trade accounts receivable of
the DAP Entities shown on their respective books as of the Initial Determination
Date will arise in the ordinary course of business, and will be collectible in
full within 90 days after the due date reflected on the invoice. For purposes of
this Agreement, trade accounts receivable shown on the books and records of the
DAP Entities as of the Initial Determination Date shall be calculated by
subtracting from the gross trade accounts receivable of the DAP Entities
(determined without regard to any intercompany transactions between the DAP
Entities) the aggregate amount of any reserves, provisions or allowances on the
books and records of the DAP Entities on the Initial Determination Date for (1)
cash discounts, (2) claims, (3) bad debts and (4) returns (the "Adjusted Trade
Accounts Receivable"). For purposes of this Agreement, the aggregate amount of
trade accounts receivable collected shall be the aggregate amount of the
Adjusted Trade Accounts Receivable actually collected by Buyer and the DAP
Entities plus the amount of any set-offs taken by customers with respect to
other obligations, including, without limitation, quantity discounts, growth
incentives, co-op advertising and distributor partnerships. Notwithstanding
anything in this Agreement to the contrary, all returns of finished goods by
customers after the Closing of finished goods sold prior to the Closing shall
reduce the aggregate amount of the trade accounts receivable as of the Initial
Determination Date valued at the standard cost of the relevant DAP Entity.
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4.22 SUPPLIERS AND CUSTOMERS. Except as set forth on Section 4.22 of
the Disclosure Schedule, none of the five largest suppliers to or 20 largest
customers of the DAP Entities, as measured by the dollar amount of purchases
therefrom or thereby during the fiscal year ended December 31, 1998, nor any
supplier who is the sole source of supply of any product essential to the DAP
Entities' businesses, has cancelled or otherwise terminated, or, to the
knowledge of Seller, threatened to cancel or otherwise terminate, its
relationship with the DAP Entities between December 31, 1998 and the close of
business on the date immediately prior to the date hereof.
4.23 YEAR 2000 PROBLEM. DAP US has developed and is implementing a
program to address on a timely basis the risk that computer applications used by
the DAP Entities may be unable properly to recognize and perform date-sensitive
functions involving certain dates prior to and any date after December 31, 1999
(the "Year 2000 Problem") and reasonably anticipates that they will on or prior
to December 31, 1999 successfully resolve the Year 2000 Problem for all material
computer applications used by them.
4.24 DISCLOSED PRIOR ACQUISITION DOCUMENTS; EXISTING INDEMNITIES. (a)
Seller has delivered to Buyer true and correct copies of the Asset Purchase
Agreement dated as of August 23, 1991 among Wassall, USG Corporation ("USG"),
BHI International Inc., DAP Inc. and DAP Canada Inc. and all amendments and
modifications thereto (the "USG Agreement"). Seller has delivered to Buyer true
and correct copies of the Purchase Agreement dated as of August 17, 1987 among
Beecham Holdings Inc. ("Beecham") and USG Industries, Inc. and all amendments
and modifications thereto, and the Purchase and Sale Agreement, dated January
24, 1983 among Plough, Inc., Schering-Plough Corporation ("Schering-Plough") and
Beecham and all amendments and modifications thereto in each case, to the extent
that such documents are in the possession of Seller.
(b) Section 4.24(a) to Disclosure Schedule contains a true and
complete list of all outstanding claims for environmental and product liability
indemnification made by Seller or any of its Affiliates directly to USG, Beecham
and/or Schering Plough since January 1, 1994. Except as set forth on Section
4.24(b) to the Disclosure Schedule, to the knowledge of Seller, there are no
disputes between Seller or any of its Affiliates, on the one hand, and USG,
Beecham and/or Schering Plough on the other hand, with respect to environmental
or product liability indemnification.
4.25 RELATIONSHIP WITH RELATED PERSONS. Neither Seller, nor any of the
Parent Affiliates, nor any director or officer thereof, has any ownership
interest in any property (whether real, personal or mixed and whether tangible
or intangible), used in or pertaining to the Business, other than (i)
intercompany transactions undertaken in the ordinary course of business
consistent with past practice and as reflected in the Financial Statements or
(ii) as disclosed elsewhere in this Agreement or the Disclosure Schedule.
4.26 PRODUCT LIABILITY CLAIMS. Section 4.26 of the Disclosure Schedule
contains a complete and accurate list of all outstanding written claims, as of
the Business Day immediately preceding the date hereof, arising from or alleged
to arise from (i) any
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actual or alleged injury to Persons or property as a result of the use of any
product manufactured by any of the DAP Entities, or (ii) a breach of warranty of
any product manufactured by any of the DAP Entities which , in either case,
alleges damages in excess of $15,000 and that are not otherwise reflected in
Section 4.11 of the Disclosure Schedule.
4.27 ENTIRE BUSINESS. The assets and properties of the DAP Entities are
sufficient to enable them to conduct their operations after the Closing
substantially as they are currently being operated.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
5.1 CORPORATE ORGANIZATION; ETC. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to conduct its
business as it is now being conducted and to own, lease and operate its property
and assets.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer has all requisite
corporate authority and power to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all required corporate action on the part of
Buyer and no other corporate proceedings on the part of Buyer are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Buyer and,
assuming this Agreement has been duly authorized, executed and delivered by
Seller, constitutes a valid and binding agreement of Buyer, enforceable against
Buyer in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
5.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth in
Section 5.3 of the Disclosure Schedule, neither the execution and delivery of
this Agreement by Buyer nor the consummation of the transactions contemplated
hereby by Buyer will (a) conflict with or violate any provision of its Articles
of Incorporation or Code of Regulations, (b) require any material Consent of, or
filing with or notification to, any Governmental Entity, except for compliance
with the applicable requirements of the HSR Act under which all required waiting
periods have expired, (c) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration or any obligation to
repay) under, any of the terms, conditions or provisions of any material
Obligation to
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which Buyer is a party or by which Buyer or any of its properties or assets may
be bound or (d) violate any Order of any Governmental Entity applicable to
Buyer.
5.4 ACQUISITION OF STOCK FOR INVESTMENT. Buyer is acquiring the Shares
for investment and not with a view toward, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
such Shares. Buyer agrees that the Shares may not be sold, transferred, offered
for sale, pledged, hypothecated or otherwise disposed of without registration
under the Securities Act, except pursuant to an exemption from such registration
under the Securities Act.
5.5 FINANCIAL CAPABILITY. Buyer has, and on the Closing Date will have,
sufficient funds to effect the Closing and all other transactions contemplated
by this Agreement.
5.6 BROKERS AND FINDERS. Except for Chase Securities, Inc. whose fees
will be paid by Buyer, none of Buyer or any of its officers, directors or
employees has employed any investment banker, broker or finder or incurred any
liability for any investment banking fees, brokerage fees, commissions or
finders' fees in connection with the transactions contemplated by this
Agreement.
5.7 BUYER'S SOPHISTICATION. Buyer is an informed and sophisticated
purchaser, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
transactions contemplated by this Agreement. Buyer acknowledges that in entering
into this Agreement, Buyer has not been induced by and has not relied upon any
representations, warranties or statements, whether express or implied, made by
any of Seller, the Parent Affiliates or the DAP Entities (or any of their
respective agents or representatives), which are not expressly set forth in
writing in this Agreement.
5.8 BUYER'S BUSINESS. Neither Buyer nor any of its Affiliates is
engaged in the production of silicone from silicon metal.
5.9 BUYER'S DELIVERIES. Buyer has delivered to Seller true and complete
copies of all compliance investigations and remediation reviews prepared on
behalf of Buyer with respect to environmental, health and safety affairs of the
DAP Entities.
ARTICLE VI.
COVENANTS OF THE PARTIES
6.1 CONDUCT OF BUSINESS OF THE DAP ENTITIES. Except as contemplated by
this Agreement, as set forth in Section 6.1 of the Disclosure Schedule or with
the prior written consent of Buyer during the period from the date of this
Agreement to the Closing Date, Seller will cause each of the DAP Entities to (i)
conduct its business and operations in the ordinary course of business
consistent with past practice except as contemplated by the terms of this
Agreement and (ii) use all commercially reasonable efforts consistent therewith
to preserve intact its properties, assets and business organizations, to keep
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available the services of its officers and employees and to maintain
satisfactory relationships with customers, suppliers, distributors and others
having commercially beneficial business relationships with it, in each case in
the ordinary course of business consistent with past practice. Without limiting
the generality of the foregoing, and except as otherwise provided in this
Agreement or as contemplated hereby or as set forth in Section 6.1 of the
Disclosure Schedule, Seller will cause the DAP Entities not to, prior to the
Closing Date, without the prior written consent of Buyer:
(a) issue, sell or pledge, or authorize or propose the issuance,
sale or pledge of (i) additional shares of capital stock, or securities
convertible into any such shares, or any rights, warrants or options to acquire
any such shares or other convertible securities or (ii) any other securities in
respect of, in lieu of, or in substitution for, the shares of capital stock of
any of the DAP Entities outstanding on the date hereof;
(b) declare or pay any dividend or distribution on any shares of
DAP US Common Stock or DAP Canada Common Stock;
(c) redeem, purchase or otherwise acquire any outstanding shares of
DAP US Common Stock or DAP Canada Common Stock;
(d) amend their Certificates or Articles of Incorporation or
By-Laws (or other comparable governing documents);
(e) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse the obligations of any other Person,
except under the credit facility referred to in Section 2.3(e) hereof in the
ordinary course of business consistent with past practice;
(f) (i) increase the rate or terms of compensation of any of its
directors, officers or employees, except such increases as shall not exceed in
the aggregate those contemplated by the 1999 Budget or in the ordinary course of
business consistent with past practice or (ii) pay or agree to pay any pension,
retirement allowance or other employee benefit not required or permitted by any
existing Plan, Benefit Arrangement or other agreement or arrangement to any such
director, officer or employee, whether past or present;
(g) sell, transfer or otherwise dispose of, any of its material
property or assets (other than inventory in the ordinary course of business or
any of the Net Assets Held for Sale) or mortgage or encumber any of its material
property or assets;
(h) except for required payments pursuant to the Management
Agreement, the Employee Lease Agreement and the DAP Intercompany Debt all as
specified in Section 2.3 or intercompany insurance allocations consistent with
past practice, make any loan to, or enter into or effect any other transaction
with any member of the Wassall Group (other than between or among the DAP
Entities) or the officers or directors of any such members;
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(i) enter into other material agreements, commitments or contracts,
except agreements, commitments or contracts made in the ordinary course of
business consistent with past practice;
(j) make any changes in its accounting principles or practices;
(k) fail to pay any material obligation or liability, except in the
ordinary course of business or unless being contested in good faith;
(l) make any capital expenditures (or commitment therefor) in
excess of $50,000 (excluding any capital expenditures in progress as of the date
hereof);
(m) loan or advance funds to, or forgive any debt of, any Person,
except in the ordinary course of business consistent with past practice;
(n) amend the Employee Lease Agreement or the Management Agreement;
(o) amend, cancel or endorse in any manner adverse to any of the
DAP Entities any of the terms, conditions or funding arrangements related to any
Insurance Policy;
(p) enter into a new, or amend an existing Benefit Arrangement with
any person except a newly hired employee subject to Buyer's approval which
approval shall not be unreasonably withheld;
(q) remove or otherwise use the funds in the Segregated Account,
other than as permitted by Section 2.3 hereof; or
(r) agree or commit to take any of the foregoing actions.
6.2 ACCESS TO INFORMATION. (a) From the date of this Agreement to the
Closing Date, Seller will cause the DAP Entities to (i) give Buyer and its
authorized representatives reasonable access to all books, records, offices and
other facilities and properties of the DAP Entities, (ii) permit Buyer to make
such inspections thereof as Buyer may reasonably request, (iii) cause its
officers to furnish Buyer with such financial and operating data and other
information with respect to the business and properties of the DAP Entities as
Buyer may from time to time reasonably request; (iv) permit an authorized
representative of Buyer to have access to appropriate personnel of any DAP
Entity (including the interim Chief Financial Officer of DAP US) as well as the
offices and other facilities and properties of the DAP Entities for the purpose
of reviewing and observing the day-to-day financial and accounting functions of
the DAP Entities; PROVIDED, HOWEVER, that any such access shall be conducted at
a reasonable time and in such a manner as not to interfere unreasonably with the
operation of the business of any of the DAP Entities; and PROVIDED, FURTHER,
that such right of access shall not grant to Buyer the right to conduct invasive
environmental testing of any kind. All such
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information and access shall be subject to the terms and conditions of the
Confidentiality Agreement.
(b) After the Closing, upon reasonable written notice, Buyer will
give or cause to be given to Seller and its authorized representatives,
reasonable access to such information relating to the DAP Entities as is
reasonably necessary for the preparation or filing of any tax return, financial
statement or report, or is otherwise reasonably requested; PROVIDED, HOWEVER,
that any such access shall be conducted at a reasonable time and in such a
manner as not to interfere unreasonably with the operations of the business of
any of the DAP Entities.
6.3 ADJUSTED TRADE ACCOUNTS RECEIVABLES. (a) Prior to Closing, Seller
shall cause the DAP Entities to commence preparing, and, after the Closing,
Buyer shall cause the DAP Entities to continue to prepare and finalize under the
direction of Seller, a schedule containing the calculation and amount of the
Adjusted Trade Accounts Receivable. After the Closing, Buyer shall cooperate
with Seller in this regard (including, without limitation, by providing Seller
access to appropriate representatives of the DAP Entities and with such
information as may be reasonably requested by Seller with respect to the
preparation of such schedule). Such schedule shall be prepared from the books
and records of the DAP Entities in accordance with GAAP and shall be delivered
by Seller to Buyer within 20 Business Days after the Closing. Within 20 Business
Days after the receipt of such schedule, Buyer shall acknowledge in writing to
Seller its approval of the calculation and amount of Adjusted Trade Accounts
Receivable set forth in such schedule, which approval shall not be unreasonably
withheld.
(b) After the Closing, Buyer shall cause the DAP Entities to use
their commercially reasonable best efforts (and in no event, less than the same
level of diligence as the DAP Entities use in seeking to collect trade accounts
receivable in the conduct of their respective businesses) to collect all
Adjusted Trade Accounts Receivable. Any trade accounts receivable collected from
any customer thereof shall first be deemed to reduce the outstanding amount of
Adjusted Trade Accounts Receivable payable by such customer.
6.4 CONSENTS AND APPROVALS. Each of the parties hereto shall use its
commercially reasonable efforts to obtain as promptly as practicable all
Consents required in connection with the consummation of the transactions
contemplated by this Agreement.
6.5 FILINGS. All required waiting periods applicable to this Agreement
and the transactions contemplated hereby under the HSR Act have expired or been
terminated. Promptly after the execution of this Agreement, each of the parties
hereto shall (and Seller shall use its commercially reasonable efforts to cause
the DAP Entities to) prepare and make or cause to be made any required filings,
submissions and notifications under the laws of any domestic or foreign
jurisdictions to the extent that such filings are necessary to consummate the
transactions contemplated hereby and will use its commercially reasonable
efforts to take all other actions necessary to consummate the
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transactions contemplated hereby in a manner consistent with applicable law.
Each of the parties hereto will furnish to the other parties such necessary
information and reasonable assistance as such other parties may reasonably
request in connection with the foregoing.
6.6 COVENANT TO SATISFY CONDITIONS. Seller will use its commercially
reasonable efforts to ensure that the conditions set forth in Article IX hereof
are satisfied, insofar as such matters are within the control of Seller, and
Buyer will use its commercially reasonable efforts to ensure that the conditions
set forth in Article VIII hereof are satisfied, insofar as such matters are
within the control of Buyer.
6.7 FURTHER ASSURANCES. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. If at any time after the Closing Date any further action is
necessary or desirable to carry out the purposes of this Agreement, the parties
hereto shall, at their own respective expense, take or cause to be taken all
such necessary action, including, without limitation, the execution and delivery
of such further instruments and documents as may be reasonably requested by any
party for such purposes or otherwise to consummate and make effective the
transactions contemplated hereby.
6.8 PREPARATION OF MONTHLY MANAGEMENT ACCOUNT. In order to enable
Wassall to comply with its public reporting requirements, Buyer will, as soon as
practicable after the Closing Date, provide Seller a monthly management account
for the DAP Entities for the month in which the Closing Date occurs in a manner
and format consistent with the monthly management accounts prepared by DAP US
prior to the Closing Date.
6.9 INSURANCE MATTERS. (a) Buyer hereby covenants and agrees that, from
and after the Closing, it shall not, and shall cause the other members of the
Buyer Group not to, (i) submit any claim under any insurance policy maintained
by any member of the Wassall Group, other than claims made in good faith, or
(ii) submit any claim based upon or arising out of events occurring or
circumstances arising after the Closing Date under any insurance policy
maintained by any member of the Wassall Group, other than insurance policies
maintained solely by one or more of the DAP Entities (the "Joint Policies"),
insuring against any loss, liability, damage or expense relating to the assets,
businesses, operations, conduct, products and employees (including former
employees) of the business of any DAP Entity, and Buyer further acknowledges and
agrees that from and after the Closing, no member of the Wassall Group shall
have any obligation to maintain or provide any insurance coverage for any loss
that may be incurred by any member of the Buyer Group that is based upon or
arises out of events occurring or circumstances arising after the Closing Date.
On or prior to the Closing Date, Seller shall purchase excess products liability
insurance coverage, the premium for which and all expenses related to which
shall be the responsibility of Buyer and which shall be paid at or prior to the
Closing, for all of the members of the Wassall Group and any of their
Subsidiaries (excluding General Cable Corporation and its Subsidiaries but
including the
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DAP Entities) as of the Closing Date for the period commencing December 31, 1994
through and including the Closing Date of (pound)50,000,000 in excess of
(pound)100,000,000 for such period which is, in all respects reasonably
acceptable to Seller, including without limitation, on the same terms and
quality of coverage as is provided under the relevant Insurance Policies. The
Buyer Group shall, as promptly as practicable, provide Seller with a copy of
each claim made under any of the Joint Policies. In addition, each of Buyer and
Seller will provide the other with reasonable access to such information
relating to the Joint Policies as the requesting party shall reasonably request.
(b) From and after the Closing, the Buyer Group shall be solely
responsible for all premiums, additional premiums (retrospective or otherwise),
premium increases or adjustments relating to the insurance policies referenced
in Section 6.9(a) hereof to the extent related to the DAP Entities. In addition,
from and after the Closing, the Buyer Group shall be solely responsible for all
claim deductibles, self-insured retentions, retrospective or adjusted premiums
and any claims handling or service charges, premiums or expenses in respect of
all claims made by, on behalf of or for the benefit of any of the DAP Entities
under such policies and for any gaps in or limits on coverage applicable to such
claims with respect to such policies. In no event shall the DAP Entities or the
Buyer Group be entitled to submit any claim, or receive any benefit, under the
insurance policies referred to in Section 6.9(a) in the event any of the DAP
Entities or the Buyer Group breaches this paragraph (b).
6.10 INTERCOMPANY ACCOUNTS. Subject to Sections 2.3 and 6.1, all
intercompany debt (i) due and owing from the Wassall Group, or any Person
related thereto, to any DAP Entity or (ii) due and owing to the Wassall Group,
or any Person related thereto, from any DAP Entity shall be eliminated or paid
in full as of the Closing Date.
6.11 TRAVELERS LETTER OF CREDIT. If by the Closing, Buyer shall fail to
cause Seller and its Affiliates to be discharged from any and all costs,
liabilities and obligations relating to the Travelers Indemnity, after the
Closing Buyer shall continue to use reasonable commercial best efforts to cause
such discharge to be made and until such discharge has been made, Buyer shall
indemnify Seller and its Affiliates with respect to any and all costs,
liabilities and obligations relating to the Travelers Letter of Credit.
6.12 TAX RETURNS. Buyer shall prepare and file all Tax returns that are
required to be filed by any of the DAP Entities after the Closing Date, PROVIDED
that with respect to any Tax returns (including, without limitation, any amended
Tax returns) relating to periods (or portions thereof) ending on or prior to the
Closing Date, Buyer shall prepare and file such Tax returns in a manner
consistent with past practice of the DAP Entities and with Seller's reasonable
input and prior consent, which consent shall not be unreasonably withheld.
6.13 DAP CHILE S.A. In the event that on or prior to the Closing, all
of the outstanding shares of DAP Chile S.A. have not been transferred to DAP US
and DAP Canada as contemplated by Section 4.3 of the Disclosure Schedule, Buyer
shall, as soon
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as reasonably practicable after the Closing, acquire or cause such DAP Entities
or other Subsidiaries of Buyer to acquire such shares.
ARTICLE VII.
EMPLOYEES AND EMPLOYEE BENEFITS
7.1 EMPLOYEES. Buyer shall be responsible for and indemnify Seller and
its Affiliates against any and all liability for severance benefits of any
nature whatsoever, whether imposed by law, agreement or policy, including, but
not limited to, any claim by any employee terminated after the Closing under the
Worker Adjustment and Retraining Notification Act or any similar applicable
state or local law, with respect to employees of any of the DAP Entities after
the Closing.
7.2 EMPLOYEE BENEFIT PLAN. Buyer shall maintain or cause the DAP
Entities to maintain for a period of at least one year from the Closing Date the
Plans or to substitute for such Plans other plans and policies of the Buyer or
DAP Entities which shall provide benefits and coverage to current and retired
employees of the DAP Entities that are in the aggregate no less favorable than
the current benefits and coverage afforded by the Plans. Buyer will credit all
such employees with service credit for their period of employment with the DAP
Entities for eligibility and vesting purposes under all such plans of Buyer or
one of its Affiliates covering such employees as if such service had been
performed for Buyer of one of its Affiliates and shall waive all pre-existing
condition exclusions with respect to group health plans of Buyer or one of its
Affiliates (to the extent such pre-existing conditions were satisfied prior to
the Closing Date under the DAP Entities' group health plans). Buyer or one of
its Affiliates shall credit each such employee with all deductible payments and
co-payments paid by such employee under the DAP Entities' group health plans
prior to the Closing Date during the current year for purposes of determining
the extent to which any such employee has satisfied any deductible or maximum
out-of-pocket limitation under such plan for such plan year.
7.3 INDEMNIFICATION. Buyer agrees that all rights to indemnification or
exculpation now existing in favor of the DAP Indemnified Parties (i) as provided
in their respective Certificates of Incorporation or By-Laws (or other
comparable governing documents) or (ii) as provided in an agreement between a
DAP Indemnified Party and a DAP Entity (the "Indemnification Agreements") or
otherwise in effect on the date hereof, all of which are set forth in Section
7.3 of the Disclosure Schedule, shall, with respect to matters occurring on or
prior to the Closing Date, continue in full force and effect for a period of not
less than five years from the Closing Date; PROVIDED, HOWEVER, that, in the
event any claim or claims are asserted or made within such five year period, all
rights to indemnification in respect of any such claim or claims shall continue
until disposition of any and all such claims. Any determination required to be
made with respect to whether a DAP Indemnified Party's conduct complies with the
standards set forth in the Certificate of Incorporation or By-Laws (or other
comparable governing documents) of a DAP Entity or under the Indemnification
Agreements or otherwise shall be made by an
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independent arbitrator mutually acceptable to such DAP Entity and such DAP
Indemnified Party (whose fees and expenses shall be paid by such DAP Entity).
7.4 COBRA. Effective as of the Closing, Buyer shall be responsible for
providing health care coverage to all "qualified beneficiaries" (as defined in
Section 4980B(g)(1) of the Code) of current or former employees of the DAP
Entities who have or have had a "qualifying event" (as defined in Section
4980B(f)(3) of the Code) prior to, on or following the Closing Date and who
elect or have elected to receive continuation of health coverage pursuant to
Section 4980B of the Code, under welfare benefit plans maintained and sponsored
by Buyer or one of its Affiliates.
ARTICLE VIII.
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to effect the transactions
contemplated hereby shall be subject to the fulfillment, or written waiver by
Seller, at or prior to the Closing of each of the following conditions:
8.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Buyer contained herein qualified as to materiality shall be true
and correct, and the representations and warranties of Buyer contained herein
not qualified as to materiality shall be true and correct in all material
respects, at and as of the Closing Date as though such representations and
warranties were made at and as of such date (except for such representations and
warranties which are by their terms made as of an earlier date, which shall
speak only as of such date).
8.2 PERFORMANCE. Buyer shall have performed and complied in all
material respects with all agreements, obligations, covenants and conditions
required by this Agreement to be performed or complied with by it on or prior to
the Closing.
8.3 NO INJUNCTION OR PROCEEDING. No Order shall have been enacted,
entered, promulgated or enforced by any Governmental Entity which prohibits or
restricts the consummation of the transactions contemplated hereby. No action or
proceeding by any Governmental Entity shall have been commenced (and be pending)
against Buyer, Seller, any DAP Entity or any of their respective Affiliates,
associates, officers or directors seeking to prevent or delay the transactions
contemplated hereby or challenging any of the terms or provisions of this
Agreement or seeking material damages in connection therewith.
8.4 CONSENTS. All Consents listed in Section 5.3 of the Disclosure
Schedule shall have been obtained.
8.5 SHAREHOLDER APPROVAL. This Agreement and the transactions
contemplated by this Agreement shall have been approved by the holders of the
required percentage of Wassall's outstanding ordinary shares at the EGM.
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8.6 RELATED MATTERS. The transactions contemplated by Sections 2.3(b)
and (c) hereof shall have occurred and Buyer shall have furnished to Seller
evidence thereof.
8.7 CERTIFICATES. Buyer shall have furnished Seller with certificates
to evidence its compliance with the conditions set forth in this Article VIII in
the form attached as Annex D.
8.8 DAP GUARANTEE. The guarantee made by DAP US pursuant to the
Guarantor Accession Agreement, dated March 15, 1999, between DAP US and The Bank
of Nova Scotia, as agent and arranger, shall be cancelled and of no further
force and effect.
8.9 INSURANCE. Buyer shall have paid to Seller all amounts required to
be paid by it pursuant to the second sentence of Section 6.9(a), provided Seller
has actually purchased such insurance policies.
ARTICLE IX.
CONDITIONS TO BUYER'S OBLIGATIONS
The obligation of Buyer to effect the transactions
contemplated hereby shall be subject to the fulfillment, or written waiver by
Buyer, at or prior to the Closing of each of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of Seller contained herein qualified as to materiality shall be true
and correct, and the representations and warranties of Seller contained herein
not qualified as to materiality shall be true and correct in all material
respects, at and as of the Closing Date as though such representations and
warranties were made at and as of such date (except for such representations and
warranties which are by their terms made as of an earlier date, which shall
speak only as of such date).
9.2 PERFORMANCE. Seller shall have performed and complied in all
material respects with all agreements, obligations, covenants and conditions
required by this Agreement to be performed or complied with by it on or prior to
the Closing.
9.3 NO INJUNCTION OR PROCEEDING. No Order shall have been enacted,
entered, promulgated or enforced by any Governmental Entity which prohibits or
restricts the consummation of the transactions contemplated hereby. No action or
proceeding by any Governmental Entity shall have been commenced (and be pending)
against Buyer, Seller, DAP US, DAP Canada or any of their respective Affiliates,
associates, officers or directors seeking to prevent or delay the transactions
contemplated hereby or challenging any of the terms or provisions of this
Agreement or seeking material damages in connection therewith.
9.4 CONSENTS. All Consents listed in Section 4.5 of the Disclosure
Schedule shall have been obtained.
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9.5 SHAREHOLDER APPROVAL. This Agreement and the transactions
contemplated by this Agreement shall have been approved by the holders of the
required percentage of Wassall's outstanding ordinary shares at the EGM.
9.6 TERMINATION LETTER. The Termination Letter shall have been duly
executed and delivered by the relevant members of the Wassall Group at or
immediately prior to the Closing.
9.7 RELATED MATTERS. The transaction contemplated by Section 2.3 shall
have occurred and Seller shall have furnished to Buyer evidence thereof.
9.8 CERTIFICATES. Seller shall have furnished Buyer with certificates
to evidence compliance by Seller with the conditions set forth in this Article
IX in the form attached as Annex E.
9.9 FIRPTA CERTIFICATE. DAP US shall have furnished Buyer with a
statement in accordance with Treas. Reg. Section 1.1445-2(c)(3) certifying that
the DAP US Common Stock are not a United States real property interest within
the meaning of Section 897(c) of the Code.
9.10 DAP GUARANTEE. The guarantee made by DAP US pursuant to the
Guarantor Accession Agreement, dated March 15, 1999, between DAP US and The Bank
of Nova Scotia, as agent and arranger, shall be cancelled and of no further
force and effect.
ARTICLE X.
AGREEMENTS OF WASSALL
10.1 GUARANTY OF WASSALL. The ultimate parent of the DAP Entities,
Wassall, absolutely and unconditionally guarantees to Buyer, the due observance
and punctual payment and performance by Seller of, and compliance by Seller
with, all of the terms, conditions and covenants of Seller contained in this
Agreement, when and as the same shall become due and owing or are to be observed
or performed, including, but not limited to, all indemnification obligations, if
any, which may become due and owing from Seller under Article XI of this
Agreement.
10.2 WASSALL EGM. Wassall shall, as soon as practicable following the
date of this Agreement, duly call, give notice of, convene and hold the EGM for
the purpose of approving this Agreement and the transactions contemplated by
this Agreement. Wassall shall, through its board of directors, recommend in its
shareholders' circular approval of the foregoing matters
10.3 CASH COLLATERAL AGREEMENT. Buyer acknowledges that Wassall has a
first lien and security interest in the Cash Collateral (as such term is defined
in the Cash Collateral Agreement), and that such interest is not assignable by
Wassall without the written consent of the other parties to the Cash Collateral
Agreement. Wassall agrees
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that it will not seek to enforce any rights it may have in the Cash Collateral
to the detriment of DAP US. Wassall also agrees, at the request of Buyer, that
it shall use commercially reasonable efforts to (i) cooperate with Buyer in any
reasonable and lawful arrangements designed to provide the benefits of Wassall's
interest in the Cash Collateral Agreement to Buyer as long as Buyer promptly
reimburses Wassall for all payments, charges or other liabilities made or
suffered by Wassall in connection therewith, and (ii) enforce, at the expense
and for the account of Buyer, any and all rights of Wassall arising from
Wassall's interest in the Cash Collateral Agreement against the other parties
thereto.
ARTICLE XI.
INDEMNIFICATION AND RELATED MATTERS
11.1 INDEMNIFICATION. (a) Subject to the provisions of this Article XI,
Seller agrees to indemnify and hold harmless the Buyer Group and the Buyer
Group's respective directors, officers, attorneys, accountants, agents and
employees and their respective heirs, successors and assigns (the "Buyer
Indemnified Parties"), from and against any and all liabilities, obligations,
damages, losses, deficiencies, costs, Taxes, penalties, interest and expenses
(including, without limitation, reasonable accountants' and attorneys' fees),
but excluding consequential damages and lost profits (except to the extent due
to a third party pursuant to a third-party claim) (collectively, "Losses"),
including, without limitation, those arising from third-party claims, arising
out of, based upon, attributable to or resulting from:
(i) the failure of any of the representations or warranties of
Seller set forth in Article IV to be true and correct as of Closing Date
for the applicable periods such representations or warranties survive; or
(ii) the breach of any covenant or other agreement on the part of
Seller under the terms of this Agreement.
(b) Subject to the provisions of this Article XI, Buyer hereby
agrees to, and shall cause the DAP Entities to, indemnify and hold harmless, the
Wassall Group and the Wassall Group's respective directors, officers, attorneys,
accountants, agents and employees and their respective heirs, successors and
assigns from and against any and all Losses, including, without limitation,
those arising from third-party claims, arising out of, based upon, attributable
to or resulting from:
(i) the failure of any of the representations or warranties of
Buyer set forth in Article V to be true and correct as of the Closing
Date for the applicable periods such representations or warranties
survive; or
(ii) the breach of any covenant or other agreement on the part of
Buyer under the terms of this Agreement; or
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(iii) the ownership of the Shares or the ownership or operation by
the DAP Entities or any predecessor or predecessors thereof of their
respective businesses or assets, regardless of when such Losses arose or
arise and regardless of by whom or when any claim for any such Losses is
asserted, except to the extent Seller has expressly agreed to indemnify
the Buyer Indemnified Parties therefor pursuant to Sections 11.1(a)(i)
and (ii).
11.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties hereto
hereby agree that the representations and warranties contained in this Agreement
shall survive the execution and delivery of this Agreement and the Closing
hereunder; PROVIDED, HOWEVER, that any claims or actions with respect thereto
(other than claims for indemnification with respect to the representations and
warranties contained in Section 4.12, which shall survive for periods
coterminous with any applicable statutes of limitation and the representations
and warranties with respect to title to the Shares contained in Section 4.2,
which shall survive indefinitely) shall terminate unless within eighteen months
after the Closing Date written notice of such claims setting forth the nature of
the claims with reasonable specificity is given to the Indemnifying Party (as
defined in Section 11.4(a) below) or such actions are commenced.
11.3 LIMITATIONS ON INDEMNIFICATION BY SELLER. (a) Seller shall not
have any liability under Section 11.1(a) (excluding a breach by Seller of any of
the representations and warranties with respect to title to the Shares contained
in Section 4.2 and the representations and warranties contained in Section 4.12)
unless the aggregate amount of Losses to the Buyer Indemnified Parties finally
determined to arise thereunder exceeds $3,000,000 (the "Basket") and, in such
event, Seller shall be required to pay the entire amount of such Losses in
excess of the Basket, subject to the limitations set forth in Sections 11.3(b),
(c) and (d) and Section 11.8.
(b) A breach of a representation or warranty of Seller set forth in
Article IV (excluding a breach by Seller of any of the representations and
warranties with respect to title to the Shares contained in Section 4.2, the
representations and warranties contained in Section 4.12 and the representation
and warranty with respect to the collectibility of trade accounts receivable
contained in Section 4.21) or a breach of a covenant or other agreement on the
part of Seller under the terms of this Agreement shall be deemed to have
occurred if (but only if) any such breach results in an individual Loss of
$15,000 or more.
(c) The aggregate amount that the Buyer Indemnified Parties shall
be entitled to recover pursuant to this Article XI for any Loss or Losses shall
be limited to $50,000,000.
(d) With respect to any trade account receivable not collected
within 90 days after the due date reflected on the invoice for such trade
account receivable (the "90 Day Period"), the Buyer Indemnified Parties shall
not be entitled to make a claim for indemnification under this Article XI for a
breach by Seller of the representation and warranty with respect to the
collectibility of such trade account receivable contained in
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Section 4.21 unless (i) Buyer causes the DAP Entities to timely make claims
under any insurance policies covering such trade account receivable to recover
the outstanding amount of such trade account receivable on behalf of Seller who
shall be entitled to receive the insurance proceeds thereof and (ii) within 60
days after the expiration of the 90 Day Period, Buyer (x) notifies Seller in
writing of its intention to make a claim for indemnification under this Article
XI in respect of such trade account receivable and (y) causes the relevant DAP
Entity to transfer to Seller or its designee such trade account receivable,
together with a copy of the credit file for the relevant customer. With respect
to any such trade account receivable (each, a "Seller Receivable"), Buyer agrees
that Seller shall have the right and authority to collect for its own account
such Seller Receivables and to endorse the name of any of the DAP Entities on
any check received on account of any such Seller Receivables. In addition, Buyer
also agrees to cause the DAP Entities promptly to transfer and deliver to Seller
any cash or other property that the DAP Entities may receive in respect of such
Seller Receivables. Notwithstanding the foregoing, if at the end of the eighteen
month period referred to in Section 11.2 no payment has been made or is due
Buyer pursuant to this Article XI (as a result of giving effect to the Basket
and the offset provided by Section 11.7), Seller shall pay to Buyer an amount
equal to the aggregate of all amounts actually received by it in respect of the
Seller Receivables, minus the sum of (x) the out-of-pocket expenses incurred by
Seller related to the collection thereof, and (y) 10% of the aggregate amount
actually received by Seller to cover Seller's internal costs and administrative
expenses; PROVIDED, HOWEVER, that if, by the end of such eighteen month period,
written notice has been given or an action has been commenced in respect of a
breach of the representation and warranty set forth in Section 4.21 which has
not been resolved as of such date, the determination as to whether any amounts
shall be payable to Buyer pursuant to this sentence shall be postponed until the
earlier of the date on which (i) a payment is made or becomes due Buyer pursuant
to this Article XI (other than by operation of this sentence), in which case no
amounts shall be payable to Buyer pursuant to this sentence, and (ii) all such
claims are resolved.
11.4 INDEMNIFICATION PROCEDURES. (a) Any Person entitled to make a
claim for indemnification under Section 11.1 (an "Indemnified Party") not
involving a claim or demand by a third party, may make a claim for
indemnification by giving written notice of the assertion of such claim covered
by this indemnity to the Person from whom it is seeking indemnification (the
"Indemnifying Party"). With respect to third-party claims, all claims for
indemnification by any Indemnified Party hereunder shall be asserted and
resolved as set forth below in this Section 11.4. In the event that any written
claim or demand for which the Indemnifying Party would be liable to any
Indemnified Party hereunder is asserted against or sought to be collected from
any Indemnified Party by a third party, such Indemnified Party shall promptly,
but in no event more than 30 days following such Indemnified Party's receipt of
such claim or demand, notify the Indemnifying Party of such claim or demand and
the amount or the estimated amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of such claim or demand)
(the "Claim Notice"); PROVIDED, HOWEVER, that the Indemnified Party's failure to
provide such notice in not more than 30 days shall not
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preclude the Indemnified Party from being indemnified for such claim or demand,
except to the extent that the failure to give timely notice results in the
forfeiture of substantive defenses available to the Indemnifying Party. The
Indemnifying Party shall have 30 days (or such shorter period as may be
necessary under the circumstances) from the personal delivery or mailing of the
Claim Notice (the "Notice Period") to notify the Indemnified Party whether or
not it desires to defend the Indemnified Party against such claim or demand. All
costs and expenses incurred by the Indemnifying Party in defending such claim or
demand shall be a liability of, and shall be paid by, the Indemnifying Party.
Except as hereinafter provided, in the event that the Indemnifying Party
notifies the Indemnified Party within the Notice Period that it desires to
defend the Indemnified Party against such claim or demand, the Indemnifying
Party shall have the right to defend the Indemnified Party by appropriate
proceedings and shall have the sole power to direct and control such defense and
to negotiate, settle or otherwise deal with such claim or demand. If any
Indemnified Party desires to participate in any such defense, it may do so at
its sole cost and expense. The Indemnified Party shall not settle a claim or
demand without the prior written consent of the Indemnifying Party. To the
extent the Indemnifying Party shall direct, control or participate in the
defense or settlement of any third-party claim or demand, the Indemnified Party
will give the Indemnifying Party and its counsel, without charge, access to,
during normal business hours, the relevant business records and other documents,
and shall permit them to consult with the employees and counsel of the
Indemnified Party. The Indemnified Party shall use its commercially reasonable
best efforts in the defense of all such claims or demands.
(b) Except in the case of common law fraud, this Article XI shall
be the exclusive remedy of the Indemnified Parties for any Losses arising out of
this Agreement or the transactions contemplated hereby.
11.5 TAX TREATMENT OF INDEMNITY PAYMENTS. The parties agree that any
indemnity payment made pursuant to this Article XI shall be treated by the
parties on their respective tax returns as an adjustment to the Purchase Price.
11.6 COMPUTATION OF LOSSES. The amount of any Loss subject to
indemnification under this Article XI shall be calculated net of (i) any Tax
benefit actually realized by the Indemnified Party on account of such Loss and
(ii) insurance proceeds (net of direct collection expenses and deductibles)
received by the Indemnified Party on account of such Loss. In the event that a
Tax benefit is actually realized as set forth in clause (i) above or an
insurance recovery is made by the Indemnified Party with respect to any Loss for
which any such Person previously has been indemnified, then a refund equal to
the aggregate amount of the realized Tax benefit or recovery (net of all direct
collection expenses, deductibles and Taxes payable with respect thereto) shall
be made promptly to the Indemnifying Party.
11.7 NET PROCEEDS OFFSET. The Deemed Net Proceeds, if any, shall be
applied to offset the amount of any payment due by Seller to Buyer under this
Article XI as a result of a breach of any representation or warranty set forth
in Sections 4.20 and/or 4.21.
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11.8 ENVIRONMENTAL CLAIMS. Notwithstanding anything to the contrary
herein, any Losses of a Buyer Indemnified Party arising out of or related to a
breach of Section 4.17 ("Environmental Losses") shall be subject to the
following terms and conditions:
(a) With respect to any Environmental Losses relating to the
operation or condition of the property owned, operated, leased or held by any
DAP Entity or any predecessor or predecessors thereof or its business or assets
on or prior to September 20, 1991, a Buyer Indemnified Party may only make a
claim against Seller after (i) exhausting all costs to be incurred by the DAP
Entities under Section 9.5 of the USG Agreement, and, then, (ii) using its best
commercial efforts to obtain indemnification for any such Environmental Losses
from USG pursuant to the USG Agreement. To the extent Seller must indemnify a
Buyer Indemnified Party for an Environmental Loss covered by this clause (a), a
Buyer Indemnified Party shall and shall cause the DAP Entities to reasonably
cooperate with Seller in any claim Seller decides to make against USG for such
Loss;
(b) A Buyer Indemnified Party shall not voluntarily undertake any
investigation or remediation of the soil or groundwater at any property
currently owned or operated by any of the DAP Entities unless such investigation
or remediation is (i) required by Environmental Laws; (ii) reasonable and
prudent to mitigate or prevent a potential Environmental Loss; or (iii) is
conducted by a Buyer Indemnified Party with a reasonable basis to believe that
there exists a condition that presents a risk to human health and safety or the
environment; and
(c) A Buyer Indemnified Party shall have the right to control the
defense of any administrative or judicial action associated with any
Environmental Loss and, subject to the limitation in clause (b) above, the
planning and implementation of any investigation and remediation, including, but
not limited to, negotiations and settlements with Government Entities as well as
the retention of environmental consultants and other necessary professionals;
provided that any required remediation shall be undertaken by qualified
environmental professionals, in a reasonable and cost-effective manner, taking
into account the industrial use of the property if permitted and any applicable
and permitted risk based cleanup standards, and shall be performed in compliance
with all applicable Orders, provided that cleanup standards for property owned
or operated by any DAP Entity shall be no more stringent than industrial use
unless otherwise required by a Governmental Entity; and provided that if Buyer
or any DAP Entity changes the use of a DAP property, Seller shall only be liable
for remediation costs and liabilities consistent with cleanup standards based on
industrial use; provided further, that a Buyer Indemnified Party shall provide
Seller with (i) periodic status reports regarding the progress of any such
remediation and, at Seller's request, the opportunity to review any materials
related to the investigations and remediation; (ii) copies of all reports and
material communications between Seller or a DAP Entity and a Government Entity;
and (iii) any other material and relevant documentation or information
reasonably requested by Seller with respect to any Environmental Loss.
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ARTICLE XII.
TERMINATION AND ABANDONMENT
12.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual consent of Seller and Buyer;
(b) by either Seller or Buyer at any time after the expiration of
60 days from the date hereof if, through no fault of the party seeking
termination, the Closing shall not have occurred;
(c) subject to clause (b), by Buyer, if there has been a material
violation or breach by Seller of any agreement, representation or warranty
contained in this Agreement which has rendered the satisfaction of any condition
to the obligations of Buyer incapable of fulfillment and such violation or
breach has not been cured in all material respects or waived by Buyer within 20
Business Days after written notice thereof;
(d) subject to clause (b), by Seller, if there has been a material
violation or breach by Buyer of any agreement, representation or warranty
contained in this Agreement which has rendered the satisfaction of any condition
to the obligations of Seller incapable of fulfillment and such violation or
breach has not been cured in all material respects or waived by Seller within 20
Business Days after the written notice thereof; or
(e) by either Buyer or Seller if there shall be in effect any Order
of a Governmental Entity of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby.
12.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of termination
of this Agreement and abandonment of the transactions contemplated hereby by any
or all of the parties pursuant to Section 12.1 hereof, written notice thereof
shall forthwith be given to the other party or parties hereto and this Agreement
shall terminate and the transactions contemplated hereby shall be abandoned,
without further action by any of the parties hereto. If this Agreement is
terminated as provided herein:
(a) upon request therefor, each party will redeliver all documents,
work papers and other material of any other party or of any of the DAP Entities
relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, to the party furnishing or causing to be furnished
the same;
(b) all information received by Buyer with respect to the business
of the DAP Entities shall be held subject to and in accordance with the terms of
the Confidentiality Agreement, which agreement shall continue notwithstanding
the termination of this Agreement;
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(c) then each of the parties shall be relieved of their duties and
obligations arising under this Agreement after the date of such termination and
such termination shall be without liability to the parties hereto; PROVIDED,
HOWEVER that, with respect to any termination pursuant to Section 12.1(b), (c)
or (d), nothing in this Section 12.2(c) shall be deemed to constitute a waiver
of any rights or remedies otherwise available under this Agreement, by operation
of law or otherwise, to the party who so terminates; and
(d) all filings, applications and other submissions made pursuant
to Section 6.5 hereof shall, to the extent practicable, be withdrawn from the
agency or other Person to which made.
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
13.1 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented at any time by the parties hereto. This Agreement may
be amended only by an instrument in writing signed on behalf of the parties
hereto.
13.2 EXTENSION; WAIVER. At any time prior to the Closing Date, the
party entitled to the benefits of the respective term or provision may (a)
extend the time for the performance of any of the obligations or other acts of
the other party hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document, certificate or writing delivered
pursuant hereto or (c) waive compliance with any obligation, covenant, agreement
or condition contained herein. Any agreement on the part of any party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of the party entitled to the benefits of such extended
or waived term or provision.
13.3 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (a) constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof (other than the
Confidentiality Agreement) and (b) shall not be assigned or transferred by Buyer
by operation of law or otherwise; PROVIDED, HOWEVER, that Buyer may assign its
rights and obligations to any wholly-owned Subsidiary of Buyer (unless to do so
would restrict or delay the consummation of the transactions contemplated by
this Agreement), but no such assignment shall relieve Buyer of its obligations
hereunder. This Agreement shall be binding upon and insure to the benefit of the
parties and their respective successors and permitted assigns.
13.4 VALIDITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.
13.5 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or by facsimile transmission or three days after being
mailed by registered or certified mail
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(return receipt requested), postage prepaid, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice; provided that notices of a change of address shall be effective only
upon receipt thereof):
(a) if to Seller, to:
Wassall DAP Holdings B.V.
Schouwburgplein 30-34
3012 CL Rotterdam
The Netherlands
Telephone: 011-31-10-224-5328
Telecopy: 011-31-10-411-7894
Attention: Robert van't Hoeft
with copies to:
Wassall USA, Inc.
301 Riverside Avenue
Westport, Connecticut 06880
Telephone: (203) 222-2211
Telecopy: (203) 226-8500
Attention: Marshall D. Gringauz
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Telecopy: (212) 310-8007
Attention: Ellen J. Odoner
(b) if to Wassall, to:
Wassall PLC
39 Victoria Street
London SWIP OEE
England
Telephone: 011-44-171-333-0303
Telecopy: 011-44-171-333-0304
Attention: Simon A. Peckham
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with copies to:
Wassall USA, Inc.
301 Riverside Avenue
Westport, Connecticut 06880
Telephone: (203) 222-2211
Telecopy: (203) 226-8500
Attention: Marshall D. Gringauz
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Telecopy: (212) 310-8007
Attention: Ellen J. Odoner
(c) if to Buyer, to:
RPM, Inc.
2628 Pearl Road, P.O. Box 777
Medina, Ohio 44258
Telephone: (330) 273-5090
Telecopy: (330) 225-6574
Attention: P. Kelly Tompkins
with a copy to:
Calfee, Halter & Griswold LLP
1400 McDonald Investment Center
800 Superior Avenue
Cleveland, Ohio 44114
Telephone: (216) 622-8200
Telecopy: (216) 241-0816
Attention: Edward W. Moore
13.6 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
the principles of conflicts of laws thereof.
13.7 SUBMISSION TO JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) The
parties hereto hereby irrevocably submit to the exclusive jurisdiction of the
United States District Court for the Southern District of New York over any
dispute arising out of or relating to this Agreement or any of the transactions
contemplated hereby and each party hereby irrevocably agrees that all claims in
respect of such dispute or any suit, action or
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proceeding related thereto may be heard and determined in such court. The
parties hereby irrevocably waive, to the fullest extent permitted by applicable
law, any objection which they may now or hereafter have to the laying of venue
of any such dispute brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or proceeding by the
mailing of a copy thereof in accordance with the provisions of Section 13.5
hereof.
13.8 PUBLICITY. Buyer and Seller will consult with each other before
issuing, and provide each other a reasonable opportunity to provide input with
respect to any press release or other public statements or filings with respect
to the transactions contemplated by this Agreement, and shall not issue any such
press release or make any such public statement or filing prior to providing
such opportunity, except as may be required by applicable law, court process or
obligations pursuant to the requirement of any stock exchange upon which the
securities of Buyer or of Wassall are listed.
13.9 DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
13.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall be
effective upon execution and delivery of either manually signed or facsimile
signed signature pages.
13.11 FEES AND EXPENSES. Whether or not the transactions contemplated
by this Agreement are consummated, all legal, accounting and other costs and
expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses, it being
understood that in no event shall the DAP Entities bear any of the legal costs
and expenses of Seller incurred in the negotiation and preparation of this
Agreement and the negotiation of the transactions contemplated hereby.
13.12 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and, except as set forth in
Sections 7.2 and 7.3 hereof, nothing in this Agreement, express or implied, is
intended by or shall confer upon any other Person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be signed by its duly authorized officers as of the date first above written.
WASSALL DAP HOLDINGS B.V.
By: /s/ Marshall D. Gringauz
--------------------------
Name: Marshall D. Gringauz
Title: Attorney-In-Fact
WASSALL PLC
By: /s/ Kevin J. Doyle
--------------------------
Name: Kevin J. Doyle
Title: Director
RPM, INC.
By: /s/ Thomas C. Sullivan
--------------------------
Name: Thomas C. Sullivan
Title: Chairman and Chief
Executive Officer
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Exhibit 4.1
[LOGO] CHASE
Fixed Rate Promissory Note
(Multiple Loans)
New York, New York ___________, 19____
For value received, the undersigned (the "Borrower") unconditionally
promises to pay to the order of THE CHASE MANHATTAN BANK (the "Bank"), at its
principal office located at 270 Park Avenue, New York, New York 10017, the
principal amount of each loan made by the Bank to the Borrower and outstanding
under this Note, on the maturity date(s) as evidenced in the Bank's records as
provided in the fifth paragraph hereof.
The Borrower promises to pay interest on the unpaid balance of the
principal amount of each such loan for each day outstanding at a fixed rate per
annum equal to the rate as evidenced in the Bank's records as provided in the
fifth paragraph hereof; provided that principal and (to the extent permitted by
law) interest not paid when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest for each day overdue at a variable rate per annum
equal to: (a) the higher of: (i) the Federal Funds Rate plus 1/2 of 1% or (ii)
the Prime Rate; plus (b) 2%. "Federal Funds Rate" means, for any day, the rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions as published by the Federal Reserve Bank of New York for such day
(or for any day that is not a banking day in New York City, for the immediately
preceding banking day). "Prime Rate" means, for any day, that rate of interest
from time to time announced by the Bank at its principal office as its prime
commercial lending rate, as in effect for such day in accordance with
announcements by the Bank of changes in such rate. Interest shall be calculated
on the basis of a year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last day). Interest on each
loan shall be due and payable at the maturity thereof (and quarterly, if
requested by the Bank). In no case shall the interest on this Note exceed the
maximum amount which the Bank may charge or collect under applicable law.
Each loan hereunder may be prepaid in whole but not in part, provided
that accrued and unpaid interest is paid on the date of such prepayment,
together with any compensation payable in accordance with the following. If
there is any payment (whether by voluntary prepayment, acceleration or
otherwise) of principal of a loan under this Note on a date other than the
scheduled maturity date thereof set forth in the first paragraph hereof, then
the Borrower will pay the Bank on demand such amount as will be sufficient in
the reasonable opinion of the Bank to compensate it for any loss, cost or
expense which the Bank determines is attributable thereto. Without limiting the
foregoing, such compensation shall include an amount equal to the excess, if
any, of: (a) the aggregate amount of interest which otherwise would have accrued
on the principal amount so paid for the period from and including the date of
payment to but excluding such maturity date at the rate of interest provided
herein over (b) the amount of interest the Bank would pay (as determined by the
Bank in good faith, such determination to be conclusive) on a deposit placed
with the Bank on the date of such payment in an amount comparable to such
principal amount and with a maturity comparable to such period.
All payments under this Note shall be made in lawful money of the
United States of America and in immediately available funds at the Bank's
principal office specified above. If any loan evidenced by this Note becomes due
and payable on a day which is not a banking day in New York City, the maturity
of such loan shall be extended to the next succeeding banking day, and interest
shall be payable for such extension on such loan at the rate of interest
specified in this Note. The Bank may (but shall not be obligated to) debit the
amount of any payment which is not made when due to any deposit account of the
Borrower with the Bank.
The date, amount, rate of interest and maturity date of each loan under
this Note and each payment of principal, loan(s) to which such principal is
applied (which shall be at the discretion of the Bank) and the
<PAGE> 2
outstanding principal balance of loans shall be recorded by the Bank on its
books and prior to any transfer and delivery of this Note, endorsed by the Bank
on the schedule attached or any continuation of the schedule. Any such
endorsement shall be conclusive in the absence of manifest error.
If any of the following events of default shall occur: (a) the Borrower
fails to pay any liability to the Bank when due and payable; (b) the Borrower or
any third party supporting or liable with respect to this Note (a "Third Party")
shall breach any representation, warranty or covenant in this Note or other
document delivered in connection with this Note ( this Note and any such
document being a "Facility Document") or in any certificate, opinion or
financial or other statement delivered in connection with a Facility Document;
(c) the Borrower or any Third Party shall fail to pay any other indebtedness
when due and payable or if there shall be any default by the Borrower or such
Third Party thereunder; (d) the Borrower or any Third Party shall become
insolvent (however evidenced) or shall seek any relief under any bankruptcy or
similar law of any jurisdiction (or any person shall seek such relief against
the Borrower or such Third Party); (e) any Facility Document shall at any time
cease to be in full force and effect or its validity or enforceability shall be
disputed or contested; or (f) any lien or security interest securing this Note
shall cease to create a valid and perfected first priority lien or security
interest in the property purported to be subject thereto; THEN, if the Bank
shall elect by notice to the Borrower, the unpaid principal amount of this Note,
together with interest and any other amounts due hereunder shall become
forthwith due and payable; provided that in the case of an event of default
under (d) above, such amounts shall automatically become due and payable without
any notice or other action by the Bank.
The Borrower waives presentment, notice of dishonor, protest and any
other formality with respect to this Note.
The Borrower shall reimburse the Bank on demand for all costs, expenses
and charges (including, without limitation, fees and charges of external legal
counsel for the Bank and costs allocated by its internal legal department) in
connection with the preparation, performance or enforcement of this Note.
This Note shall be binding on the Borrower and its successors and
assigns and shall inure to the benefit of the Bank and its successors and
assigns; provided that the Borrower may not delegate any obligations hereunder
without the prior written consent of the Bank. Without limiting any provision of
this Note, the obligations under this Note shall continue in full force and
effect and shall be binding on: (a) the estate of the Borrower if the Borrower
is an individual; and (b) any successor partnership and or previous partners and
their respective estates if the Borrower is a partnership, regardless of any
change in the partnership as a result of death, retirement or otherwise.
THIS NOTE SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. THE
BORROWER CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE STATE OR
FEDERAL COURTS LOCATED IN THE CITY OF NEW YORK. SERVICE OF PROCESS BY THE BANK
IN CONNECTION WITH ANY SUCH DISPUTE SHALL BE BINDING ON THE BORROWER IF SENT TO
THE BORROWER BY REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW. THE BORROWER
WAIVES ANY RIGHT THE BORROWER MAY HAVE TO JURY TRIAL.
Address: P.O. Box 777 RPM, Inc.
Medina, OH 44258 -------------------------
(Name of Borrower)
By /s/ David P. Reif
Name: David P. Reif
Title: Vice President
Corporate Finance
By _______________________
Name:
Title:
2
<PAGE> 3
<TABLE>
<CAPTION>
Amount of
Date Payment and Principal
and Amount Loan Number Balance
Loan of Loan Maturity to Which Remaining Notation
Number and Rate Date Applied Unpaid Made by
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
3
